The government’s push to boost the digital economy and the rise in smartphone adoption and increase in digital payments have accelerated the e-commerce market, which is projected to post impressive gains and grow at 18 percent annually through 2025.
According to the Economic Survey tabled in Parliament, the expansion of e-commerce to newer segments like grocery, fresh-to-home fruits and vegetables, and general merchandise has contributed to the rise in customer base beyond traditional buyers.
“There has also been an increase in the adoption of digital solutions by Micro, Small, and Medium Enterprises (MSMEs) like e-commerce and e-procurement, realizing the prospects of increased revenues and margins, improved market reach, access to new markets, and customer acquisition," survey added.
Moreover, citing figures from the Global Payments Report by Worldpay FIS, E-commerce has not only empowered small businesses by removing geographical barriers and providing a large customer base but also allowed them to deal directly with manufacturers and suppliers, thus reducing the cost of procurement.
“This increased access to suppliers significantly helps small business owners scale up their businesses at a much lower investment level, thus boosting their cost structure,” added the survey.
In terms of order volume and valuation, post-covid-19 years have been the most successful years for Indian e-commerce start-ups.
As per the Retail and E-commerce Trends report released by Unicommerce and Wazir Advisors14, overall e-commerce order volume witnessed a growth of 69.4 percent YoY in FY22, driven mainly by consumers from tier-II and tier-III cities in the last two years.
Besides, GeM attained an annual procurement of Rs 1 lakh crore within FY22, representing a 160 percent growth compared to the last financial year. GeM has taken a host of steps to onboard products of Self-Help Groups (SHGs), tribal communities, artisans, weavers, and MSMEs.
57 percent of the total business on GeM has come through the MSME units, and female entrepreneurs have contributed over 6 percent, the survey added.