E-commerce industry experts have been watching growth rates in India explode for several years. Two recent reports confirm its incredible growth will continue and that India will eventually fulfill that promise and turn into an e-commerce power second only to China.
China passed the U.S. as the world’s largest e-commerce market in 2013 and has widened the gap every year. While India only accounts for one percent of global e-commerce spend right now, it will ride annual growth rates in the mid-20s to more than $2 trillion in e-commerce spend per year by 2034, passing the U.S. as the second-largest e-commerce market in the world, predicts e-commerce acquirer and processor Worldpay. In its 2016 Global Payment Report, Worldpay said rising wages, the world’s fastest growing smartphone market and the largest youth population in the world will combine to drive Indian e-commerce to new heights.
“The world of Indian e-commerce may look small today, but all the data indicates we will see explosive growth in the coming years,” said Ron Kalifa, vice chairman of Worldpay. “With hundreds of millions of ‘mobile first’ shoppers poised to come online—particularly in rural communities—the opportunity is enormous.”
The potential in India of the rural communities to affect e-commerce growth was underscored in another report that examined current Internet penetration. According to the India B2C E-Commerce Report 2016 from Ecommerce Europe, little more than a quarter of Indians currently enjoy fixed Internet, but mobile Internet will unlock the e-commerce power of rural Indians.
“The rise of m-commerce is set to revolutionize the market,” said Dieter Pluess, CEO of Asendia Asia. “Traditionally, the growth of online retailing has been held back by low Internet penetration, with just 27 percent of the population benefiting from a fixed connection, but the 150 percent year-on-year growth rate in smartphone-based penetration is introducing a wider audience to e-commerce.”