Electronic commerce, commonly known as e-commerce, is digital trading of services and goods on the internet. Some of the activities involved in it are online shopping, internet-based payments, mobile banking and internet-based services. In India, the e-commerce sector has been proliferated by low cost smartphones, fast broadband connectivity and government friendly policies. Nowadays, it has spread to such areas as retailing and travel, education and financial services. The digital economy of India is changing fast with the entry of global and local participants in the business.

Key Points for RAS Mains

Scope of E-Commerce in India

• Indicative of online shopping:
  • Retail & Wholesale
  • Streaming and OTT (e.g. Netflix, Spotify)
  • Online learning (e.g., BYJU, Unacademy )
  • Ordering food (e.g. Zomato, Swiggy)
  • Tourist travel booking (e.g. IRCTC, MakeMyTrip)
  • Internet fin- banking services

Types of E-Commerce Models

The development of E-Commerce in India: The present & future

• Market size as of 2024 (in terms of dollars): 125 billion (7 % of the entire retail market)
• Projected Growth:
  • 2026: 163 billion dollars
  • 2030: 345 billion dollars
  • 2035: 0.55 trillion dollars
• Growth Rate:15% CAGR( Compound Annual Growth Rate)

Key Driver of growth

• Digital Infrastructure: The popularity of smartphones, growing the internet applications in the countryside.
• UPI and Digital Payments: Are Secure, Speedy, and have a high rate of adoption among consumer categories.
• Government Push: Digital India and National Logistics Policy are such schemes that promote digital and physical logistics.
• Youth Led Demand: Industry is highly tech-savvy and likes variety, convenience, and door-to-door shipment.

E-Commerce Business Models in India

Government Efforts in Favour of E-Commerce

• Draft E-Commerce Policy: Helpful promotion of competition, security of consumers and innovation.
• ONDC (Open Network for Digital Commerce): It has the intention of decentralizing e-commerce by connecting all the buyers and sellers within a single platform.
• Consumer Protection (E-Commerce) Rules, 2020: Reckons with transparency, warrants on returns and sellers disclosure.
• National Logistics Policy (2022): Aimed at cutting down logistics costs (up to ~1314% of GDP at the moment).
• India Stack & Digital Tools: Aadhaar, UPI, DigiLocker and e-KYC facilitate hassle-free online purchases and verification of identity online.

Future occurrences in the E-Commerce of India

• Hyperlocal & Quick Commerce: The rise of hyperlocal 10-30 minutes delivery companies such as Blinkit or Zepto.
• Voice-Assisted Shopping: Voice search and smart speakers are supposed to make the user experience better with the help of AI.
• Personalization (AI-Based): Custom recommendations enhance conversion rates and customer satisfaction.
• Green & Circular Economy: Electric delivery vehicles and eco friendly packaging will become the norm.
• Social Commerce: Social media shopping: also known as shopping through Instagram and YouTube.

International initiative and export capabilities.

• Amazon global selling program: assisted Indian traders to export merchandise valued at 5 billion dollars in 2024.
• Walmart India Export Plan: Vision is to be exporting goods worth 10 billion by the year 2027.
• Integration of MSME: The number of Indian small businesses is rising to serve customers in other parts of the world using online platforms.

Conclusion for RPSC

The e-commerce industry in India is growing at a tremendous pace and has been influenced by the use of digital innovation, young population, and the existence of strong structure. It has a great scope of domestic development and internationalization. Inclusive, sustainable, and export-oriented digital commerce has flourished in India with the support of favorable policies and updated technologies, as it is likely to lead the world in the endeavour of digital commerce