Is Indian e-commerce sector worth all the attention?

Indian e-commerce
Indian e-commerce sector has been getting a lot of funding from some of the biggest retailers and venture capitalist companies in the world. But how is the sector performing and does it merit all the attention that it has been receiving?

How much is Indian e-commerce sector?

According to US research company eMarketer, India’s e-commerce sector is valued at $33 billion. The sector is estimated to account for barely 3% of the total retail market in the country this year. But three years from now, it is predicted to be worth around $50 billion meaning it should grow by 50% in the next decade.

How much funding is India’s e-commerce sector getting?

Despite the rather underwhelming figures, the e-commerce sector in India is getting a lot of funding. Just last month, US retail giant Walmart announced that it was purchasing a majority stake in Indian firm Flipkart for an astounding $16 billion. The deal was valued at $22 billion.

There are other major players in the Indian e-commerce sector worth billions of dollars. American firm Amazon has an Indian arm which is reportedly worth $16 billion. Digital payments company Paytm has an e-commerce firm named Paytm Mall valued at $2 billion. Then there’s another firm called Shopclues that’s worth $1.1 billion.

How much more will Indian e-commerce sector get?

Don’t expect the trend to stop in the next few years. Major e-commerce players are investing heavily in India. Amazon, for one, is said to be splurging $2 billion on top of the $5 billion that its boss Jeff Bezos had initially committed to the sector. Even Chinese firm Alibaba has been investing heavily by backing Paytm Mall and startup BigBasket.

These investments hinge on the optimism that an increase in internet penetration in India will further e-commerce growth in the country. It is estimated that more than 300 million Indians or roughly 25% of the population will be using a smartphone at the end of the year, increasing internet penetration in the process.