Scope of eCommerce Business in India

Scope of eCommerce

The scope of eCommerce business in India is undoubtedly going to increase year after year.

A recent report by the Internet and Mobile Association of India shows that a fast-paced growth of around 50% is to be expected in the coming five years.

The primary attribute of this growth is undoubtedly the rise of 4G mobile internet users and a large number of smartphone users because the same mobile commerce is expected to change how business transactions happen in India.


The future of eCommerce business is turning out to be more famous day after day according to the market demand. An increasing number of people are finding the concept of shopping online advantageous if not striking.

The standards that obtain customer service sections have tremendously touched the heart of people due to their love for online services. With this information growing popular, it’s important to understand how to evaluate your eCommerce model.

With an increasing number of people looking toward e-commerce for their business, it is important to evaluate the model in order to improve and expand upon it where necessary.

And this requirement is generating innovations worldwide focused on delivery time, ease of transactions, and several features served by eCommerce businesses, for example, drone delivery or artificial intelligence.

The future scope of e-commerce business is turning out to be more famous day after day according to the market demand.

This article is all about scope, future, application, and various critical factors for the growth of the scope of the eCommerce business in India.

Also Read: Top eCommerce Marketplaces in India

What is scope of ecommerce business?

eCommerce is still not at its peak and the scope of the eCommerce business in India is still big. Thanks to the advancements of social media and mobile technology, online shopping has become a new way of life.

As you know people are now going online to shop for clothes, appliances, furniture, and a lot more.

Another significant contributor to the future scope of eCommerce in India is the e-tailing industry which largely deals in providing jewelry, apparel, and kitchen appliances online.

Scope of eCommerce
Scope of eCommerce

Websites like Flipkart, Myntra, Amazon, Snapdeal, Jabong, etc. are all examples of the enormous success of eCommerce in India.

Due to these firms, India is one of the fastest-growing eCommerce markets in Asia/Pacific with China investing as much.

Many analysts believe that the advent of 3G/4G speed in net connectivity has been a major cog in the wheel for such growth in this market.

India has been the heart of the e-commerce market since 2016 and it’s still growing with a tremendous growth rate of 70%.

The consumer base is expected to hit 900 million in 2024, and this ensures that any ecommerce website would soon be the best business in India, as far as profits and growth are concerned.

Read More: What is a Multi-Vendor E-commerce Website

Some market leaders and CEOs of the eCommerce industry have only positives to speak about the e-commerce growth in India.

Kunal Bahl, co-founder and CEO of SnapDeal believes that e-commerce sector has risen tremendously in India and that their success is proof of the rise in interest in online shopping.

Pwc India leader Sandeep Ladda believes that the e-commerce sector in India has seen unprecedented growth due to the advancements in mobile tech and that it will be the go to platform for e-commerce businesses in the future.

PayU co-founder Nitin Gupta also strengthens this point by Ladda as he says that 35 % of all transactions now happen through mobile phones which is triple that of the percentage in the last fiscal.

He also added that the brick and mortar businesses will join hands with the e-commerce websites feeding off each other in a win-win situation and with online wallet, cashback and coupon websites becoming more and more popular in India, hassle free functioning is assured which will bring more success to e-commerce in India.

Key factors for the growth of eCommerce Business Scope in India:

  • Reduction in the cost of broadband internet facilities to ensure more people come online.
  • Encouraging more domain registrations and letting e-commerce websites maintain them at cheaper rates (at least till they make substantial profits).
  • Encouraging innovative schemes such as the COD (Cash on Delivery) in a country where credit card use is not prominent shows how we have eased into this particular niche. A lot of the major e-commerce websites are based in India and the consistency, and reliability of these sites have shown the people how hassle-free, shopping and availing services are.
  • Bringing internet facilities to the rural areas in India as it remains a largely untapped resource and the possibilities are endless for a major boom in the e-commerce industry, as India’s Internet penetration is 0.5% of the population. If these e-commerce businesses can reach to these regions, their net value can only increase from the current values.
  • E-commerce can also spread to newer disciplines such as health services in these remote areas in India and help in offering health solutions to people who do not have the luxury of hospitals in their vicinity. This will certainly help once the rural areas are provided with internet facilities and will be a potential business prospect shortly.

Categorization of eCommerce Business

E-commerce stands for purchasing, selling, and exchanging goods or services using internet-enabled devices, where transactions or sales are performed electronically.

Electronic commerce emerged in the early 1990s, and its use has increased at a rapid rate. For your information, the first secure retail transaction done over the internet was by NetMarket in the year 1994.

Still, the majority of companies don’t have an e-commerce website. In fact, having an eCommerce-enabled website and operations of business via the Internet has become a necessity.

As you know, everything from food, clothing to entertainment and furniture can be brought online.

eCommerce vertices can be divided into  broad categories :

B2B (Business-to-Business)

One company doing business with another company via internet-enabled devices.

For example, a manufacturer is buying raw material from another raw material manufacturer, or a distributor is buying online from a manufacturer.

Such B2B eCommerce business is volumetric, and price varies based on the quantity of the order and is often negotiable.

B2C (Business-to-Consumer)

One company is selling goods or services online to the general public typically through an eCommerce website or mobile application, directly to consumers over the Internet.

An example of B2C portals includes Flipkart, Myntra, or Snapdeal. A B2C eCommerce transaction would be an individual buying a pair of shoes through Flipkart’s website.

C2B (Consumer-to-Business)

A customer posts his requirement on a website online, and several companies review such requirements (RFQ) and quote on the project.

The consumer reviews all bids and finalizes the deal with the enterprise going to complete the project. C2B business involves consumers seeking products or services from a business/company.

For example, you can take ref. of

C2C (Consumer-to-Consumer)

Many sites are offering free classifieds listing where individuals can buy and sell thanks to sites such as OLX or Quikr, where people can buy and sell stuff nearby.

Such transactions are called consumer-to-consumer eCommerce. Where users sell products to other prospective customers.

An example would be someone selling something that he or she no longer needs, and he listed the same on OLX, and another person who needs the same thing contacts the seller and get the transaction done.

Challenges of eCommerce Business in India

Challenges of eCommerce Business in India

Despite huge opportunities in the eCommerce business, eCommerce business presents several particular challenges which are sometimes difficult to handle for any new startup.

However, without any doubt, India is a great place for the scope of eCommerce project has been a profitable eCommerce market for the last 10 years in a row.

Thus many venture capitalists, angel investors, private companies & high-net-worth individuals are investing money in eCommerce, no matter how small or big the business is.

E-commerce is growing rapidly, but it is still facing several hurdles in operations in India.

Internet Penetration:

The Internet is mandatory is the foundation of eCommerce. However, in India internet penetration is still low at 34.8 percent of the population.

However, due to the growth of the mobile internet, India is witnessing an exceptional increase in the year 2015 and 2016, allowing eCommerce businesses to reach to masses easily.

scope of ecommerce project

Due to increasing mobile internet users, it is predicted that eCommerce growth will touch new heights in India. With 4G taking the Indian market by storm, the demand for smartphones is taking an upward swing.

When more and more people are shifting to high-speed networks using dirt-cheap mobile internet plans, the future of eCommerce is bright and it’s a perfect time to kickstart your brand’s own e-commerce store.

Branding & Marketing:

To drive sales and traffic on an eCommerce site involves a heavy budget for branding and marketing. This cost is significant and can be calculated as cost per acquisition or cost per sale.

As per marketing guru’s the current average CPA for eCommerce business is between INR 500–1000, which isn’t practically sustainable for small startups having less to invest in such high volume marketing campaign.

However, a concept or niche eCommerce business can drive sales in very low CPA due to the fact that the customer is limited for such a category of products.

scope of ecommerce
Scope of eCommerce


With the entry of several players already in the Indian eCommerce market, the customer is pampered by offering big discounts, offers, deals, and easy return options, etc. resulting in low margins.

e-commerce is expected to reach US$ 188 billion in India by 2025, according to Grant Thornton.

A turnover of $50 billion made India the eighth-largest market for e-commerce in 2020, behind France and ahead of Canada.

NASSCOM estimates that the e-commerce market in India will grow at 5% in 2021, with sales expected to reach 56.6 billion.

In an interview with Business Standard, Flipkart promoters said that “Profitability is not a focus area for them and they are still looking to acquire more market shares.“.

Logistics & Delivery:

Delivering products to buyers is still a major hurdle for any new eCommerce startup.

Keep in mind that eCommerce logistics is different from traditional deliveries of goods because there are no middlemen involved in the final delivery of the product to customers’ doorstep.

The critical element in eCommerce logistics is the last-mile delivery of the product to the customer. Several eCommerce startups failed because of their last-mile delivery capability.


Taxation was another big hurdle in India till the introduction of GST, before GST for any startup, taxation was a major factor for the less growth rate of eCommerce in India as compared to developed countries like the USA and the UK.

scope of ecommerce

In those countries, tax slabs are uniform for all sectors whereas the tax structure of India was variable from product to product and region to region.

This factor was responsible for creating accounting problems for any eCommerce business because eCommerce is not limited to product categories or regions.

Under India’s former tax system, it was confusing to sell products from one state to another. Each time you did, you had to deal with a variety of taxes and paper works. A startup eCommerce business, that didn’t have the budget to hire a tax professional, the possibility of extra sales was simply not worth the pain

The new GST tax system has almost eliminated all of the confusing taxes and paperwork, and now its replaced them with a single tax system called GST. With GST, you can sell to customers in your own state and in other states too, without bothering about various taxes.

In conclusion, you have the opportunity to sell your products to customers from Kashmir to Kanyakumari or around the world. It also gives you the opportunity to compete with big corporations.

After all, as a small business, you may be able to offer more manageable quantities, more personalized services to get more shoppers towards you.

Touch and Feel:

Indian customers’ mindset is more traditional and people are more comfortable buying products from physical stores rather than eCommerce stores.

eCommerce companies selling products like apparel, handicrafts, jewelry have to face challenges to sell their products as the buyers want to see, touch, and feel before they make the buying decision.


In this modern age of mobile shopping or online shopping, retail stores are getting the repercussion of these eCommerce applications.

The increasing use of mobile commerce applications is transforming the retail industry. But a large number of customers still prefer window shopping due to several reasons mainly so they can touch and feel the product.

Mobile App to Drive Loyalty

If you want more loyal customers, a mobile application of your retail store is certainly necessary. According to Google, 84% of offline shoppers carrying a smartphone use their devices to get help while they are in store.

Just imagine when you have a mobile app for your own brand or store they can easily become your customers, as they are already familiar with the e-shopping eCo-system.

They can review your app on the Google Play Store or iOS app store which will help you to engage more new customers for sure.

Many retail stores have used this way to kick-start their business. Mobile application helps customers to navigate nearest stores, check inventories, scan barcodes for extended products, etc.

FAQ: Scope of eCommerce

What are the challenges of selling to consumers online?

There are many challenges in one company selling their goods or services through an online medium. The company must spend time building trust with potential customers by providing them with enough information to create a well-informed purchase decision. They also have to figure out how best to process credit cards over the internet which gets complicated when shipping internationally due to timescales drastically different between countries.

What is the scope of eCommerce?

Ecommerce is growing at a rapid pace, with more and more people preferring to shop online for the convenience, variety, and competitive prices it offers. Brick-and-mortar stores are feeling the pinch as more and more people shift to buying online, and this trend is only going to continue in the years to come.

This presents a huge opportunity for entrepreneurs who are looking to set up an eCommerce business. With the right strategies in place, you can make a lot of money from this rapidly growing segment of the economy. There are a few things you need to keep in mind though if you want to be successful in eCommerce:

What is the future scope of e-commerce in India?

According to a new study conducted by ASSOCHAM Reserve Bank of India, online shoppers in India spend three times as much as offline shoppers. This overwhelming statistic tells the story of all the huge growth potential for e-commerce companies in this country.

The festival season across India is just a couple of months away and people will soon start making their decisions on which way to go with their purchases. A single person might have 10 items that he needs to buy, but after going through various shopping options they may realize it’s cheaper and easier to buy everything from one place, the web. Growth rate projections for this sector are up by 7% from last year with experts forecasting more growth seen in upcoming years.

What is the future scope of eCommerce?

The future scope of eCommerce is quite large. Today, online sales from retailers such as Amazon and Walmart account for more than 20% of total retail sales.

In 1996, less than 1 percent of consumers shopped online because it was a fledgling industry that could only offer books, music, and videos to purchase. Fast-forward to today and you’ll find a channel with an estimated 500 million product SKUs available at any moment through thousands of storefronts including traditional retailers’ websites plus marketplaces like eBay, Tictail, or Etsy. And the eCommerce channel continues to grow at a rapid pace: E-commerce revenue reached $394 billion in 2013, up from just $2 billion in 1997.


E-commerce is still one of the biggest business opportunities and any entrepreneur can take advantage if it’s implemented in the right way, even if the stock market falls down, the e-commerce business will survive on its own and continue receiving high transactions.

E-commerce business in India has a tremendous scope and the future of e-commerce looks really lively.

In addition, eCommerce needs will always need the introduction of new technologies and marketing techniques for optimal growth.

eCommerce has undeniably an important part of our everyday life. The successful companies of the future will be those who take the e-commerce business seriously, dedicating enough resources for the development of eCommerce solutions and marketing their eCommerce business.

The scope of a market depends upon the population of a country and it also depends on the expenditure ratio of the people. This report tells us that when it comes to eCommerce Business in India there is immense scope for this business in the future. In fact, the scope is sure to increase year after year.

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