New Delhi: India's burgeoning e-commerce market is set to double over the next five years, driven by advances in alternative payments technologies such as eWallets, mobile bank transfers and credit cards. According to new data from leading payments company Worldpay, India is on track to be worth US$104 billion by 2021, which will make it the seventh biggest e-commerce market in the world.
M-Commerce is the fastest growing sector, projected to quadruple over the next four years, making up 45% of all online sales. Indian consumers' enthusiasm for mobile shopping is supported by the popularity of new payment methods such as eWallets, which account for an ever-increasing share of the market. In 2017 eWallets represented 26% of all online payments, but this is set to grow to 37% by 2021.
Bank transfers are the second most popular payment method with 27% of the market today; this is set to increase to 34% by 2021 thanks to the advance of new payment technologies. Worldpay's report predicts a big drop in the popularity of cash on delivery, falling from 13.5% of the market today to just 3% in five years. The decline in cash and the rise of alternative payments are fuelled by India's recent "cash crisis", which followed the recent withdrawal of 500 and 1,000 rupee notes from circulation in an effort to reduce corruption.
The findings are published in Worldpay's annual Global Payments Report, which analysed eCommerce spending patterns across 36 different markets on five continents. The report forecasts that the Asia-Pacific e-commerce market will grow by an average of 12% annually, and is set to be worth US$2,100 billion by 2021. India is one of the fastest growing markets in the regions, set to double over the next five years.
The country's demonetisation drive, coupled with a new generation of digital payment services is opening up new opportunities for a relatively high proportion of "unbanked" to make purchases online, where this was previously not possible.
India is one of the fastest- growing e-commerce markets in the world, and demonetisation is proving to be a strong force pushing the use of digital payments. India's cash economy has struggled in 2017, but this has been offset by significant growth in alternative payment methods and credit cards, and their share of the market will only grow as more Indian consumers gain access to the Internet via mobile and desktop devices, said Phil Pomford, General Manager, Worldpay.
The growth of e-commerce in India, coupled with the country's enormous potential, provides lucrative opportunities for retailers and merchants who can support India's preferred payment methods, concluded Pomford.
Worldpay has compiled the following recommendations for merchants looking to cash in on the continued strong growth of m-commerce and e-commerce in India and the wider Asia-Pacific region.
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