India's e-commerce sector is estimated to witness record growth impelled by the ever-increasing tendency and reach for online shopping. In a recent report, its value is estimated to rise at a compounded annual growth rate of 18.7 percent to $292.3 billion in 2028 from $147.3 billion this year.
The outlook for e-commerce payments in India, on the other hand, is pretty good due to a range of government initiatives like 'Make in India' and 'Startup India'. Added to this is the surge in the number of online shoppers.
For instance, GlobalData, a leading data and analytics company, forecasted that e-commerce is set to record phenomenal growth of 23.8% this year. According to Ravi Sharma at GlobalData, e-commerce sales should further be supported by increased consumer preference and enhanced payment facilities, coupled with increased adoptions of alternative modes of payments.
While recent data from the Telecom Regulatory Authority of India shows that internet subscriptions have risen to 954 million as of March from 881 million a year ago, the robust growth is enticing many merchants - especially small and medium enterprises - into trying their luck in e-commerce.
The report states that alternative payment solutions became the darling of online shoppers, commanding a whopping 58% market share in 2023. Sharma says, "This includes popular alternatives from brands such as Amazon Pay and Google Pay, which have risen significantly in usage over the past five years.
Meanwhile, payment cards remain the second most popular e-commerce payment option, holding a 25.7% market share. Of those, credit and charge cards were the most prevalent, accounting for 15.4% share of the market share in 2023.
On the other hand, cash payments for e-commerce transactions have become minimal at 6.2% market share, according to the report.
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