India's e-commerce economy to touch Rs 7 lakh crore in 2021

India's consumer Internet economy (e-commerce industry) is set to touch the $100 billion (Rs 7.29 lakh-crore) mark for the first time in 2021 driven by massive growth in consumer adoption across sectors. This is a growth of a little over 30% over last year.

In 2020, the overall Internet GMV (gross merchandise value) touched $75 billion (Rs 5.46 lakh crore), which includes services and products after Covid-19-induced lockdowns forced consumers to purchase goods and services from their homes, according to experts tracking the sector.

"The year 2020 has been a landmark year for India's consumer Internet economy. Overall, India’s ecommerce services and products market touched a GMV of $75 billion in 2020, and is now creating a large impact on the overall economy. We expect it to accelerate further in 2021, driven by massive growth in consumer adoption and satisfaction seen in 2020 across sectors," Anil Kumar, Co-founder and CEO of RedSeer told DH. RedSeer tracks the ecommerce sector in India.

Indian Internet economy is expected to cross triple digits GMV for the first time in 2021. It will eventually become a $250 billion scale and 10% of private consumption in 2025, he said.

The overall gross market transaction value dropped earlier last year due to the pandemic but recovered by the end of the year. During the peak of lockdown in April last year, the overall market gross transaction value had dropped to $10 billion from $75 billion in January 2020. However, as the country opened up during the unlock phases, the GTV improved and touched close to $80 billion by December 2020. This excludes foodtech, mobility and travel.

"The growth rate of the ecommerce sector was in the range of 6-7% in 2020 and we expect it to be in the similar range during 2021 as well.  The Internet is now mainstream and access to the Internet on smartphones is changing the buying behaviour of consumers. Tier-2 and Tier-3 towns are largely contributing to the growth of the Internet economy," Kumar said.

According to Umang Bedi, co-founder of DailyHunt, Internet adoption has gone up by 100 million users last year and there are about 700 million connected users at any time in the country. 

The consumption in Tier-2 and Tier-3 cities picked up due to a number of reasons like reverse migration, adoption of digital mode among others, experts add.

Mrigank Gutgutia, director, RedSeer, said, "Year 2020 has been a remarkable year with 40% growth in e-tailing, which resulted in multi-fold increase in online penetration across categories. Fashion and electronics brands have been strong beneficiaries of the digital. Within fashion, subcategories like footwear and accessories have seen maximum digitisation."