Indian e-commerce to define next decade of consumerisation: EY-IVCA
Mar 27, 2021
New Delhi [India], Mar 27 : Indian e-commerce and consumer internet companies are deepening their impact across most sectors from agriculture to health and education with the right intervention of innovative technologies to bring in much-needed democratisation and efficiencies.
The past five years have seen an expansion in the breadth of services available at fingertips providing greater convenience and access, according to the recent EY-IVCA India Trendbook 2021.
"India is at an inflection point with digital transformation witnessing mass adoption, bringing onboard a wave of first-time consumers and transforming the business landscape," said Ankur Pahwa, Partner and National Leader at EY India.
"Technology enabled innovations across digital payments, on-demand services, analytics driven customer engagement and digital advertisements are expected to drive growth in the sector."
Karthik Reddy, Managing Partner of Blume Ventures and Vice-Chairperson of IVC Association (IVCA), said a surge of demand from tier 2 and tier 3 cities is expected in the next phase of e-commerce, bringing in the next 100s of millions of consumers.
"A new wave of investments in this sector in both B2B and B2C commerce are creating a huge gig economy, several sub-sectors have emerged, and innovation is going to storefronts, local commerce, and e-commerce infra and payments."
Lenskart, Flipkart, Delhivery and Nykaa may launch bellwether IPOs and unleash the potential of the sector. The government is a huge enabler of this shift and is working along with investors, startups and industry bodies like IVCA to support the growth of the sector, said Reddy.
The EY-IVCA India Trendbook 2021 says edtech in India is estimated to grow 3.7x in the next five years from 2.8 billion dollars in 2020 to 10.4 billion dollars and 37 million-plus paid edtech users by 2025.
The growth of fintech during 2020-25 is projected at 22.7 per cent CAGR. The estimated gamers in 2021 will be 628 million.
India's e-commerce is expected to reach 99 billion dollars by 2024, growing at a 27 per cent CAGR over 2019-24 with grocery and fashion/apparel likely to be the key drivers of incremental growth.
PE/VC investment in the B2B stage has been rising since this sector is still new with the potential to grow big in the future. About 1.2 per cent or 10.5 billion dollars of India's grocery sales are expected to be online by 2023.
The majority of funding is towards building supply chain, expanding into new segments, global expansion, acquisition or consolidation, and bring innovative product offerings to the market.
