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Blog - Published on November 22, 2021

Welcome to India

India's e-commerce market is one of the largest in the world, currently worth $52.6 billion USD. If the size of the current opportunity alone isn't enough to make this an attractive market, the rate at which Indian consumers are going digital is also unlocking huge potential for the future. Smartphone penetration has increased in recent years and is estimated to reach 760m in 2021, potentially enabling the number of Indian online users to reach almost 1 billion by 2030. So it's clear to see why it is often such a key region for merchants considering geographic expansion. 

The local payment culture 

To take advantage of the lucrative opportunities the Indian market presents, it is crucial to understand how Indian consumers prefer to pay. 

Digital wallets are the most popular payment method in India, accounting for 40% of all e-commerce payments. Whether paying for a new laptop, or for groceries, digital payments are overwhelmingly present in India and have't altered consumer behavior in the region. In the financial year 2021, over 40 billion digital transactions worth more than a quadrillion Indian rupees were recorded across the country. 

Credit and debit cards are a close second, accounting for 30% of e-commerce payments. India has 913.8 million debit cards in circulation, and nearly the entire portfolio of cards in circulation are not activated for international purchases. So offering local payment methods is crucial for any merchant expanding into India, or else risk losing out on a big share of the e-commerce market. 

The e-commerce market 

As a result of the Covid-19 pandemic, as in many markets worldwide, Asian consumers turned to e-commerce in multitudes. India's online population is estimated to have grown by 24% during lockdown, and analysts predict annual growth for the e-commerce market of 18%, with the sector's value rising to $16.5 billion USD in 2021. 

Security

The Reserve Bank of India (RBI) has mandated two-factor authentication (3DSecure) for all online transactions. Unlike in other countries, a positive correlation is seen between two-factor authorization and higher conversion rates in India. Indian customers are very sensitive to online security and prefer additional authentication while buying online. 

Ultimately, the e-commerce market in India is evolving at an extremely fast pace. Yapstone is equipped to help you navigate this market. From our team of experts, to our on the ground support, Yapstone can help you scale your business. Find out more by downloading our India Country Guide or get in touch today by contacting globalscale@yapstone.com. 

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