India’s ecommerce market will surpass $120 billion in transactional value, a study by FIS, an American financial technology company, forecasts.
Between 2021 to 2025, the ecommerce market is expected to grow by 96 percent, the growth driven by an increasing shift towards digital payments, according to the 2022 Global Payments Report by Worldpay from FIS, which offers a snapshot of the global payments landscape.
“The ecommerce industry in India has witnessed strong growth over the last few years and this growth is showing no signs of slowing down,” said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS.
Riding on the global sentiment, Indian consumers are relying more on mobile commerce than desktop ecommerce. Globally, the transaction value from mobile devices accounted for 52 percent of all ecommerce spend in 2021, the report said.
In India, consumers preferred to use digital wallets 45 percent of the time, over debit, credit and charge cards for ecommerce payments— a trend common in Asia Pacific countries including China, Indonesia and and the Philippines.
Regional wallets such as Paytm in India, and WeChat and AliPay in China, are major factors for this, as they facilitate a diverse and competitive payments ecosystem in these countries.
While cash is still the leading in-store payment method in 2021, responsible for 37.1 percent of transaction value, digital wallets are projected to overtake cash as the most popular in-store payment method by 2023, when they are expected to account for 30.8 percent of point-of-sale (POS) transaction value.
India’s POS market is expected to grow by 28.8 percent to $1.08 trillion between 2021 and 2025.
“The COVID-19 pandemic has brought fundamental changes in the way people shop and make their purchase decisions throughout India, and it’s now vital for merchants to provide customers with a hassle-free and convenient shopping experience,” Phil said.
“Those who offer a compelling value proposition to consumers are well positioned to thrive as India’s e-commerce market continues its dramatic growth,” he added.
The study projected that digital wallets will account for more than half– 52.9 percent– of transaction value by 2025.
As the share of wallets and other digital payment grows, the share of prepaid cards, bank transfers and cash on delivery market will fall, and are projected to collectively comprise just 8.8 percent of ecommerce transaction value by 2025.
“Buy now, pay later (BNPL) is India’s fastest-growing online payment method,” according to the report.
It added that BNPL is projected to rise to 8.6 percent of e-commerce market value by 2025, up from just 3 percent in 2021.
Edited by Anju Narayanan