The Indian e-commerce market is set to overtake the US and become the second largest in the world in less than two decades, going head-to-head with China for the numero uno position, according to a report by global payments firm Worldpay. The report said the e-commerce market is expected to grow exponentially with emerging markets leading the charge particularly India, where the segment is predicted to mature by 28 per cent per year from 2016 to 2020.
â€œAccording to Worldpay projections, India will be the worldâ€™s second largest e-commerce market by 2034, thanks to massive surges in internet penetration, a swelling millennial population and the rising uptake of mobile phones,â€ it added.
Ron Kalifa, Vice Chairman at Worldpay, said the research found a number of trends that point to Indiaâ€™s potential for â€œastounding e-commerce growth in the next two decadesâ€.
â€œThe market is predicted to reach USD 63.7 billion by 2020 and overtake the US by 2034. This enormous development will in turn open up enormous opportunities for companies who sell online,â€ he said.
However, it is essential that merchants stake their claim today in order to win over Indiaâ€™s commerce-hungry population and capitalise on future e-commerce growth, he added.
â€œLeading companies are already making their move, indicating a clear incentive for merchants to gain their foothold within Indiaâ€™s budding eCommerce market as soon as possible,â€ Kalifa said.
Worldpay analysed 30 markets around the world, including India, China, Hong Kong, South Korea, Singapore and Australia in Asia-Pacific. The Global Payments Report is compiled using a combination of Worldpayâ€™s data and insights as well as external findings and secondary data.
The report said much of Indiaâ€™s eCommerce growth will be the result of rising internet penetration as roughly 350 million Indian citizens are already online and that number is expected to nearly double to 600 million by 2020.
Another major factor driving e-commerce growth in India is the huge uptake of mobile phones. India is the worldâ€™s biggest consumer of mobile phones with the price of data plans running two times cheaper than in China and three times cheaper than in the United States, it said.
As the countryâ€™s middle class switches over to 3G and 4G networks, both offered at affordable prices, India is expected to see more mobile shopping, especially amongst millennials.
â€œYoung people shopping via smartphones are already responsible for sharp increases in Indiaâ€™s online spend; and with 70 per cent of the population below the age of 35, millennials are expected to continue driving rapid digitisation even further,â€ it said.