Speed ​​Trading: The Next Frontier

In recent years, India has witnessed a boom in internet and smartphone penetration. As per sources, as of June 2023, the number of internet connections in India has increased significantly to 895 million, driven by the ‘Digital India’ agenda. The smartphone base has also increased significantly and is expected to reach 1.1 billion by 2025. This rapid growth in internet users and smartphone penetration coupled with the rise in income has supported the growth of the Indian e-commerce sector. The Indian e-commerce sector has transformed the way business is done in India and has opened up various segments of trade, from business to business (B2B), direct to consumer (D2C), consumer to consumer (C2C) and consumer to business (C2B). Major segments like D2C and B2B have witnessed a huge growth in recent years.

The Indian e-commerce industry has seen many ups and downs and rapid changes in the market. Companies like Snapdeal cam have come and gone. However, companies like Flipkart (acquired by Walmart in 2018), Amazon India, the emergence of Paytm Mall and Myntra have played a significant role in the growth of the e-commerce sector.

The market size of the e-commerce industry in India in 2014 was just US$14 billion, which was a rapid growth of around US$39 billion, with a significant growth of 65% in just 3 years. Subsequently, the market share fell to US$21 billion, which is a decline of around 60%.

And then came COVID-19, which accelerated the adoption of e-commerce and fast-paced commerce industry with diverse product categories and order value segments aligned with changing consumer preferences, and the dominance of metro cities created significant opportunities for retailers and key players to tap into the rapidly growing market, with the industry growing to US$67 million with a growth of over 200%. Post Covid 19, revenue growth in 2022 fell to 0.7%, which is a significant decline compared to 54% and 33% in 2020 and 2021.

Following this experience, the Indian e-commerce sector resumed its growth path post-2022 and was valued at US$123 million in 2024 as compared to US$84 million in 2022.

Indian e-commerce platforms have achieved a significant milestone by achieving a GMV (Gross Merchandise Value) of US$ 60 billion in fiscal year 2023, which is a growth of 22% over the previous year. There is a lot of support from the government to promote the growth of the industry, for example, 100% FDI is allowed in B2B e-commerce and under the automatic route, it is allowed in the e-commerce marketplace model.

Investment in the e-commerce sector has increased significantly, which will further support the industry’s growth. For example, homegrown e-commerce giant Flipkart is set to raise $1 billion in a new round of funding, while its parent company Walmart is eyeing a $600 million investment.

The Indian e-commerce (Quick Commerce) market is poised for exponential growth, estimated to reach USD 19,932.5 million, driven by rising internet and smartphone penetration, convenience of fast delivery, and accelerated adoption during the COVID-19 pandemic. Diverse product categories and order value segments are in line with changing consumer preferences, and the dominance of metro cities creates significant opportunities for retailers and key players looking to tap into the rapidly growing market.

India is emerging as the third-largest consumer market, according to Deloitte India Report. The country’s online retail market is expected to reach $325 billion by 2030, up from $70 billion in 2022, driven largely by the rapid growth of e-commerce in second- and third-tier cities.

The e-commerce industry in India has evolved significantly over the years, facing various ups and downs. The future looks bright, with continuous growth in warehouse space usage, deeper market penetration and technological advancements. However, the rise of fast-paced commerce poses new challenges. E-commerce companies need to innovate and adapt their strategies to compete effectively in this dynamic landscape.