eCommerce

In The New Bharat

And It’s Future
A Report By

Supported By

In Association With
 ...Foreword...

Over the past decade, India has become a global eCommerce

powerhouse, experiencing remarkable growth driven by technology,
innovation, and a young, tech-savvy population. Forecasts suggest
the sector will grow from $75 billion in 2022 to an estimated $350
billion by 2030, potentially outpacing the US and becoming the world’s
second-largest eCommerce market by 2034. This growth is attributed
...A Word About
to the rapid adoption of smartphones, with over 560 million users, and
accessible data plans, making the internet more available. Shiprocket...
Government initiatives like Digital India and promoting a cashless
economy have played a crucial role in encouraging digital businesses
and startups in the eCommerce space. The Indian eCommerce Shiprocket is India’s largest eCommerce enablement platform providing
landscape is a vibrant mix of homegrown startups and global giants digital retailers an end-to-end customer experience platform. The
aiming to tap into this lucrative market. platform creating an operating system for direct commerce enables
shipping, fulfillment, customer communication and marketing tools as
‘eCommerce in the New Bharat and it’s report’ delves into the Indian well as providers for SMEs, D2C retailers, and social commerce retailers
eCommerce ecosystem, covering its current state, market dynamics, in India. With 25+ courier partners on board, the brand permits pan-
and challenges. It provides valuable insights for understanding and India as well as international shipping deliveries. Its shipping solutions
navigating this rapidly changing industry. are available across 24,000+ pin codes within India and 220+ countries
and territories worldwide.
The future of eCommerce in India is full of possibilities, with
technological advancements like AI, Big Data, and IoT revolutionizing Launched in 2017, Shiprocket is on a mission to create a seamless
the online shopping experience. Logistics and last-mile delivery are logistics data platform that connects retailers, carriers, and consumers
essential for growth, and the report explores innovative solutions to across national and international locations. Shiprocket provides a
address challenges effectively. technology stack to help retailers integrate their shopping websites on
Shopify, Magento, WooCommerce, Zoho, and others with the platform’s
This report will serve as a guide for entrepreneurs, policymakers, multi-carrier API to manage orders, prints, and shipping labels. It also
and investors, offering valuable insights and success stories to shape avails tracking information from multiple providers including managing
a future-ready eCommerce ecosystem. Gratitude goes to the team Cash on Delivery (COD) orders and payment reconciliation. Shiprocket
behind this report and all contributors for enriching this knowledge also offers state-of-the-art fulfillment solutions with more than 45+
repository. warehouses located across India. The technology stack provides a
robust post-purchase experience to consumers resulting in higher
Let’s embark on this journey of discovery, innovation, and progress engagement and lower RTO (failed deliveries).
together. The future of Indian eCommerce awaits with open arms, and
I’m excited to witness the extraordinary transformations. Today, Shiprocket is the platform behind more than 270K sellers who
generate a GMV of more than $3B annually. The platform delivers more
Wishing you all a compelling reading experience! than 220kshipments daily and is growing transactions 2.5-3X year on
year.

Saahil Goel
CEO & Co-founder, Shiprocket

4 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 5
 ...Foreword... ...Foreword...
The digital adoption in India has surpassed all expectations, and the
retail sector stands out as a significant beneficiary, witnessing an
unprecedented surge in online shoppers. Today, online shopping
extends to hundreds of pin-codes, making goods and services India’s eCommerce is at the cusp of a profound transformation in
accessible even to people in the remotest towns and villages. While India’s Techade. The New Bharat is an increasingly digital country, with
acknowledging the role of internet penetration, due credit must be the rise of not just digital access for citizens and businesses alike, but
given to the logistics players for enabling transportation and delivery also acceptance of digital tools by every corner of the country.
across the country.
While eCommerce in India has existed for many years, we’re seeing a
The numbers speak volumes, as this report indicates. The Indian fundamental shift in how brands, sellers, consumers and institutions
eCommerce space is on the verge of a substantial leap, projected to alike approach digital commerce. With the emergence of UPI and
grow from $75 billion in 2022 to an impressive $350 billion by 2030, ONDC, India is breaking away from the traditional approach to
potentially even surpassing the US by 2034. The Open Network for eCommerce, enabling businesses of all sizes and individuals from
Digital Commerce (ONDC) emerges as a significant contributor to Indian diverse backgrounds to partake in the growing digital economy.
eCommerce, bridging connections between big and small brands and
customers nationwide. Cash transactions remain popular in Tier 2 and “eCommerce in the New Bharat and It’s Future” report delves into
Tier 3 cities, but digital payments are expected to surge by 88 per cent, the future of inclusive digital commerce in India and the promising
leading to a 34 per cent decline in cash usage by 2026. opportunities that are unlocked through the Open Network for Digital
Commerce (ONDC).
The direct-to-consumer (D2C) space is thriving in India, with the market
expected to reach $60 billion by 2027. This trend not only offers The report illuminates the empowering effects of ONDC, especially
consumers a wide variety of options but also empowers entrepreneurs as operational efficiency scales both domestically and unlocks
from small towns to pursue their dreams and venture into the world opportunities internationally. With simplified operations, businesses
of retail. can now focus on what they do best – offering top-notch products and
services to their customers.
This report delves into various aspects of the Indian eCommerce
ecosystem, with a special emphasis on cross-border logistics. India’s As we embark on this journey towards inclusive digital commerce,
rise as a developed nation has piqued international interest in its this report serves as an enlightening window into the potential that
brands, and logistics play a crucial role in connecting these brands to digital commerce and ONDC holds for India. We hope that the insights
their global consumer base. The report highlights the challenges faced shared herein will inspire stakeholders from all walks of life to embrace
by brands in reaching their international customers and sheds light India’s Digital Commerce moment, leading us towards a more inclusive,
on what international customers expect when shopping from Indian vibrant, and interconnected digital landscape.
websites/brands.
Let us collectively seize the opportunities unlocked by ONDC and work
Our primary objective in presenting this report is to provide valuable data together to empower every business, every consumer, and every
and insights for entrepreneurs and anyone interested in understanding citizen, ensuring that no one is left behind in the journey towards an
the current dynamics of the Indian eCommerce landscape. The survey inclusive digital future.
results presented within these pages reveal fascinating insights.
Warm Regards,
We genuinely hope that you find this report both interesting and
insightful, and that you enjoy reading it as much as we did while putting
it all together.

T Koshy
MD & CEO, ONDC

Amitabh Taneja
Editor-in-Chief, IMAGES Group

6 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 7
 ...CONTENTS...
KEY TAKEAWAYS ............................................................................................. 10

INTRODUCTION ................................................................................................ 11

...A CHAPTER 1
i
ii
eCommerce rollercoaster 2020-23 ......... ............................ 12
A growing sector ................................................................................................................. 14
Advent of a new era ............................................................................................................ 15
special iii Government support ......................................................................................................... 16

CHAPTER 2
dedication... i
ii
eCommerce disruptors ....................................................... 18
Supply chain ....................................................................................................................... 20
Technology ......................................................................................................................... 21
iii Digital payments ................................................................................................................. 22
We dedicate eCommerce in the New Bharat and it’s future report to the countless entrepreneurs,
innovators, and visionaries who have tirelessly worked to shape and elevate India’s eCommerce landscape. CHAPTER 3 Cash-On-Delivery (COD) insights ...................................... 24
Your relentless pursuit of excellence has not only transformed the way we shop but has also inspired a
generation to dream big and embrace the boundless possibilities of the digital world. CHAPTER 4 Consumer behaviour and expectation ................................ 30
We also dedicate this report to the resilient and enterprising Indian consumers, whose unwavering trust CHAPTER 5 Consumer remains the King ................................................ 38
and support have been the driving force behind the remarkable growth of eCommerce in the country.
Your evolving preferences and discerning choices constantly challenge businesses to innovate and deliver
i Future of consumption market ............................................................................................ 40
exceptional experiences. ii Growth drivers ........................................................................................................... .......... 41
iii Indian retail market .............................................................................................................. 42
We also express our gratitude to the Indian government for its visionary digital initiatives and policies that
have created an enabling environment for eCommerce to thrive. Your commitment to fostering a digital iv Social & cultural influence .................................................................................................... 43
ecosystem and promoting innovation has played a crucial role in propelling India’s eCommerce industry
to new heights. CHAPTER 6 Tapping the potential of ......................................................... 44
cross-border logistics
Lastly, we extend our heartfelt dedication to the future generations, who will inherit the legacy of this
vibrant eCommerce ecosystem. May this report serve as a guiding light, empowering them to build a i. Elements of cross-border eCommerce ............................................................................... 47
sustainable, inclusive, and technologically advanced eCommerce landscape that continues to shape the ii. Cross-border eCommerce value chain ............................................................................... 48
future of India’s digital economy.
iii. Domestic v/s cross-border shipment model ....................................................................... 49
With gratitude and admiration, iv. Government initiatives to promote cross-border trade ....................................................... 52
Team Shiprocket v Role of enablers ................................................................................................................... 57

CHAPTER 7 New beacons of online retail ....... ....................................... 60

All material printed in this publication is the sole property of Images Multimedia Pvt. Ltd. All printed matter contained in the magazine is based
on the information provided by the writers/authors. The views, ideas, comments and opinions expressed are solely of the writers/authors or i Omnichannel ....................................................................................................................... 62
those featured in the articles and the Editor and Printer & Publisher do not necessarily subscribe to the same.
ii Sustainability ....................................................................................................................... 64
Printed & published by S P Taneja on behalf of Images Multimedia Pvt. Ltd. Printed at Modest Print Pack (P) Ltd. C-52, D.D.A. Shed Okhla
Industrial Area Phase -1, New Delhi - 110 020 and published by S P Taneja from S - 61A Okhla Industrial Area Phase – 2, New Delhi 110 020 iii Rise of D2C ......................................................................................... ................................ 66
Editor: Amitabh Taneja
In relation to any advertisements appearing in this publication, readers are recommended to make appropriate enquiries before entering into
any commitments. Images Multimedia Pvt. Ltd. does not vouch for any claims made by the advertisers of products and services. The Printer,
CHAPTER 8 ONDC – The game changer ................................................ 72
Publisher and Editor-in-Chief of the publication shall not be held for any consequences in the event of such claims not being honored by the
advertisers. References ....................................................................................................... 78
Copyright Images Multimedia Pvt. Ltd. All rights reserved. Reproduction in any manner is prohibited. All disputes are subject to the jurisdiction
of competent courts and forums in Delhi/New Delhi only. Images Retail does not accept responsibility for returning unsolicited manuscripts
and photographs.

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 Key takeaways Shiprocket survey
SHIPROCKET conducted an online survey of consumers who are regular shoppers on brand sites as well as
Indian eCommerce Projection marketplaces, and brands operating in the eCommerce segment. The survey covered responses from 1,000 Indian
and 500 international shoppers, as well as 500 brands across categories – beauty, lifestyle, fashion, food, FMCG,
Indian eCommerce and it’s future The demand for suitable eCommerce enablers electronics and others. The idea of surveying both brands and consumers aimed at incorporating perspective of
The Indian eCommerce industry is poised for to strengthen supply chains, enhance logistics both sides – demand and supply.
significant growth, projected to increase from $75 efficiency, and ensure secure payment ecosystems
billion in 2022 to $350 billion by 2030. By 2034, it is on the rise. Among these enablers, SHIPROCKET From multinationals to newly launched D2C brands, the survey has a healthy mix of respondents sharing their
may even surpass the US to become the second- ranks in the top three, as recognized by brand eCommerce journey citing challenges faced so far, and growing expectations from service providers and enablers
largest eCommerce market. surveyed. to help their business gain a stronghold in time to come. The consumer survey results are focused on specifics of
By 2026, cash transactions are expected to decrease The Indian D2C (direct-to-consumer) market shoppers’ behaviour, preferences and expectations in the new age of Indian eCommerce.
by 34 per cent, while digital payments are anticipated is expected to experience substantial growth,
to surge by 88 per cent. This rise in digital payments increasing fivefold from $12 billion in 2022 to $60 The survey findings have been judiciously encapsulated within relevant sections of this report
is primarily driven by the increasing popularity of billion by 2027, with an impressive growth rate of
Unified Payments Interface (UPI). around 40 per cent.
Efficient logistics, both domestically and The Open Network for Digital Commerce (ONDC) is National consumer: Age profile International consumer: Age profile
internationally, is currently the most significant poised to be a pivotal game-changer in the Indian
challenge (as agreed by 38 per cent of brands eCommerce market. Once it achieves a certain level 10% 30% 6%
surveyed) in the eCommerce sector. Timely delivery of scale, it has the potential to trigger a price war 6% 25%
plays a crucial role in determining efficiency. among eCommerce players.
13%

Consumer and brands 28%

24%
In India, 76 per cent of consumers we surveyed prefer Both Indian (43 per cent) and international (38 per
to prepay for their online orders, resorting to cash- cent) consumers find ‘delayed delivery’ to be the
on-delivery (COD) only when uncertain. However, for most frustrating online shopping experience.
brands, the usage of COD payments has remained More than half of Indian consumers prioritize ‘Quality’ 23% 36%
relatively stable over the years, showing no significant when shopping online, while international consumers
decline or surge. (68 per cent) expect a combination of factors such as
Brands have the potential to convert 88 per cent price, trust, quality, delivery, and reviews and ratings 20-30 Yrs 31-40 Yrs 41-50 Yrs 20-30 Yrs 31-40 Yrs 41-50 Yrs
of consumers to prepay for their online orders by from any online shopping website. 51-60 Yrs >60 Yrs 51-60 Yrs >60 Yrs
offering attractive discounts. Surprisingly, 72 per cent of Indian brands do not sell
Among the prepay options, UPI is the most favored internationally, presenting significant opportunities
choice for 57 per cent of consumers, closely followed for expansion. However, 38 per cent of brands are National consumer: By city type International consumer: By country
by credit cards at 31 per cent. uncertain about how to sell overseas, while the USA
A considerable 80 per cent of online shoppers prefer remains an appealing market for another 38 per cent
to make their purchases from marketplaces, which of brands.
also happen to be the primary sales channel for Both Indian and international consumers show a
brands. keen interest in shopping for Indian products abroad, 21% 57%
25%
The top three categories preferred by online with over 60 per cent engaging in such purchases.
shoppers are fashion and accessories (48 per cent), A considerable percentage of consumers and brands
electronics (32 per cent), and grocery (30 per cent). (ranging from 70 to 80+) prioritize sustainability and
environmental consciousness.
79%
Consumption and retail 19%

The per capita consumption, projected to reach The present Indian retail market, valued at $930
$2,948 by 2030, will play a crucial role in propelling billion in 2022, is anticipated to grow at a Compound
the Indian eCommerce market forward. Annual Growth Rate (CAGR) of approximately 10 Metro Non-Metro UK USA Others
percent, reaching $1,930 billion by 2030.

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 eCommerce Rollercoaster
CHAPTER 1
2020-2023
 Indian eCommerce: A growing sector Advent of a new era in Indian
with an edge eCommerce
The Indian eCommerce market is on a growth trajectory,
with a market size of $30 billion in 2020, growth to ~$75 Growth indicators:
billion in 2022. Touching $100 billion the next year, Recent developments:
the market is expected to more than treble by 2030, Today, eCommerce adoption in India is
reaching a size of $350 billion. eCommerce in India is spread close to 100 per cent pin-codes India’s eCommerce sector receiving $15 billion of
expected to surpass the US to become the second PE/VC investments in 2021 was a 5.4 times increase
largest eCommerce market in the world by 2034. It is interesting to note that Tier 2 and y-o-y, and remained the highest investment value
3 cities now make up nearly half of all received by any sector ever in India.
With over 800 million internet users, the country is shoppers and contribute three out of
currently the second largest internet market in the every five orders for leading e-retail
world and did ~62 billion UPI transactions in 2022. By platforms
(2021)
the end of 2023 year, India is expected to have over 907 January: Walmart invited Indian sellers to join
million internet users translating into ~64 per cent of The average selling price (ASP) in tier its US marketplace with an aim of exporting $10
the country’s total population 2 and smaller towns is only marginally billion worth of goods from India each year by
lower than that in Tier 1 and metro cities 2027; Flipkart announced expansion in its grocery
Owing to the spread of eCommerce in India, we have services besides offering services to 1,800 Indian
witnessed a major transformation in the way business Electronics and apparel make up nearly cities.
is conducted. This has opened up business segments 70 per cent of the eCommerce market
like: Business-to-Business (B2B), Direct-to-Consumer in transaction value July: Flipkart announced raising $3.6 billion in new
(D2C), Consumer-to-Consumer (C2C) and Consumer-to- funding from various sources including sovereign
Business (C2B). Among these, the segments such as D2C In 2022, Indian eCommerce and funds, private equities and Walmart (parent
and B2B have experienced immense growth in recent consumer internet companies raised company).
years. $15.4 billion in PE/VC funding, 2x
increase from $8.2 billion in 2020 The unfortunate COVID-19 phase can be credited September: CARS24 - India’s leading used car
It is important to note that the Indian eCommerce sector with opening a new chapter in the Indian eCommerce eCommerce platform, raised $450 million in
has directly impacted country’s Micro, Small & Medium industry. It created a permanent change in the funding that comprised a $340 million Series F
Enterprises (MSMEs) by providing means of financing, consumer behaviour with consumers inclined to equity round and $110 million in debt from various
technology and training, and has disrupted overall purchase almost everything online. financial institutions; Bikayi – a mobile commerce
market. enabler, raised $10.8 million in a Series A funding
In this new age of eCommerce, online shopping has round led by Sequoia Capital India.
The growth of MSME sector will be primarily driven increased significantly in Tier 2 and 3 cities due to the
by factors like growing penetration of internet, digital easy availability of internet on cheaper tariffs. This November: XPDEL - US-based eCommerce
payments, hyper-local logistics, rise of eCommerce 350 trend provided a push to the warehousing and logistics fulfillment and logistics service provider, announced
enablers, analytics-driven customer engagement, sector beyond Tier 1 cities. . expansion in India.
digital advertisements and expansion of cross-border
eCommerce. Owing to the boom in eCommerce sector, As of 2020, India had emerged as the eighth largest
the Indian e-retail industry is projected to exceed ~300- eCommerce market. Following China and the US, India
(2022)
350 million shoppers by 2026IBEF boasted the third largest online shopper community June: Amazon India signed an MoU with Manipur
with 150 million users in FY21 - a number projected to Handloom & Handicrafts Development Corporation
Source: investindia.gov.in reach 350 million by FY26. Limited (MHHDCL) - a Government of Manipur
188 Enterprise, to support the growth of artisans and
Value in billion U.S. dollars

Consequently the smartphone shipment volume weavers across the state.

reached 150 million units in 2020 and increased to
169 million units in 2021. Furthermore, the shipment August: SHIPROCKET entered the country’s unicorn
99 of 5G smartphones saw remarkable growth, surging club. SHIPROCKET raised $33.5 mn in a Series E2
84 74.8 by 555 percent in 2021, driven by significant consumer round fresh funding round led by Lightrock India.
demand in the post-lockdown period.
39 30
14 20 21.9
Source: IBEF

2014 2015 2017 2018 2020 2021 2022 2024 2025 2030
Source: Statista

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 Government support
The initiatives by Government of India (GoI) such as Digital India, Make in India, Start-up India, Skill
India and Innovation Fund, have been instrumental in shaping the Indian eCommerce.

As of November 2022, the Government e-Marketplace (GeM) portal served 12.28 million orders
worth `334,933 Crores from 5.44 million registered sellers and service providers for 62,247 buyer
organisations.

Open Network for Digital Commerce (ONDC) was incorporated on December 31, 2022
with initial investment from Quality Council of India (QCI) and Protean eGov Technologies Ltd.
Department for Promotion of Industry and Internal Trade (DPIIT) will use ONDC to set protocols
for cataloguing, vendor discovery and price discovery. The department aims to provide equal
opportunities to all marketplace players to make optimum use of the eCommerce ecosystem in
the larger interest of the country and its citizen.

October 2020: Ministry of Commerce and Industry invited Startups to register at public
procurement portal, GeM, and offer goods and services to government organisations and PSUs.

In order to increase the participation of foreign players in eCommerce, Indian Government hiked
the limit of FDI in eCommerce marketplace model to up to 100 per cent (in B2B models).

Government of India (GOI) has made heavy investment in rolling out 5G fiber network which will
further help boost eCommerce in India.
Source: IBEF

Ecommerce
In The New Bharat
And It’s Future
16 eCommerce in the New Bharat and it’s Future 2023 | A Report by
CHAPTER 2
eCommerce disruptors
Supply chain | Technology | Digital payments unleashed
 Supply chain Technology – Open AI and ChatGPT gaining
traction in the field of eCommerce
Supply chain management (SCM) in eCommerce has Cost reduction: The much improved SCM in
evolved into a major focus area, especially when eCommerce which includes efficient time and
it comes to cross border delivery / trade. The trend inventory management measures amongst other Tech development to boost eCommerce
can also be attributed to the supply chain disruptions things that have significantly reduced costs in the Use in retail sector
experienced in recent times due to geopolitical supply, and distribution processes, which in turn, has India offers a vast opportunity for OpenAI due to its
hurdles. Some key trends expected to improve supply led to higher profits for the stakeholders. large population and growing internet user base The areas of its contribution can include:-
chain ecosystem would include:- Product launch support
Minimised delivery delays: Thanks to well-equipped In Feb 2023, Velocity – an Indian financial technology Customer feedback analysis
Transparency in supply chain: eCommerce SCMs are and professional enablers as well as technology company, launched the country’s first ChatGPT Competitor analysis
now aiming transparency to oversee the status of all advancements, the more frequent delays which integrated chatbot dubbed as “Lexi“. The ChatGPT Social media engagement
the activities – supplies, warehousing, and distribution were a common occurrence pre-Covid have now integration with the Velocity Insights will help the Upselling and cross-selling
to ensure comprehensive tracking and management been streamlined. In addition, the logistic errors in eCommerce giants by offering them AI-powered Localisation and language support
of all processes from procuring to shipping of ordered distribution channels which used to massively impact business solutions in a conversational manner Trend forecasting
goods up to the end consumer. Any interruption can profits have been minimised too.
then be timely addressed. Bhashini, a team at Ministry of Electronics and
Scaling omnichannel practices: The well-structured Information Technology (MEITY), is testing the
Strengthened customer relationships: Effective supply chain in eCommerce is facilitating omnichannel WhatsApp chatbot powered by ChatGPTThe Indian Express Incorporated open AI &
supply chains are constantly working to improve their engagement that ultimately leads to increased ChatGPT
on-time deliveries – one of the major expectations customer engagement on all major platforms. The Ministry of Electronics and IT have plans to
of consumers. Its success not only strengthens the integrate ChatGPT with WhatsApp to help Indian
customer relationships but also aids the brands to farmers understand and learn about several
keep an eye on customer requirements. An improved government schemes
customer relationship helps businesses get feedback 34%
and requirements about their products directly from Since large datasets of the several local Indian
the consumers. This provides a competitive edge as languages need to be created to train the AI 66%
timely adjustments can be made to the changing chatbot on them, OpenAI announced enhancing
demands in the market. ChatGPT with multilingual support for Indian
languages, boosting usage of ChatGPT in Indian
marketStartup News

ChatGPT rising
YES NO
ChatGPT is now being used by businesses to
improve customer experience Source: SHIPROCKET Brands survey

Some of the Indian companies using ChatGPT:-

SHIPROCKET
Air India
Koo
Shop Two-third of brands are yet
Tata Consultancy Services to incorporate open AI and
Trendence ChatGPT who will expectantly
Exotel adopt the technology sooner or
Contentstack later, given its need in present
day eCommerce businesses.

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 Digital payments unleashed
Prior to demonetisation in 2016, digital payments accounted for 10 per cent of all transactions in the country.
Since then the number has doubled.NIC With new age eCommerce, it is bound to gain more market share.
Mobile payments have largely contributed in shaping the future of digital payments. Mobile payments are
becoming an increasingly popular option for consumers. This trend is expected to continue in the coming
years, with projections suggesting that mobile payments will account for a significant percentage of all
digital payments by 2025.

The government-backed technologies such

as UPI, RuPay, DigiLocker, eKYC are:-
helping promote digital transactions
increasing their adoption in smaller cities
driving innovation in this space FIS 2023 Global
Payments Report
In the FY22 budget, a `1,500 Crores scheme
was proposed to financially incentivise Cash is expected to decline by
digital payments 34 per cent in transaction value,
and digital wallets are expected
eCommerce to benefit from government to rise in transaction value by 88
initiatives to boost rural broadband per cent by 2026
penetration within the ambit of Digital India
The Unified Payments Interface
BharatNet – one such program, with an (UPI) helped eCommerce
outlay of approximately `61,000 Crores is Account-to-Account (A2A)
aiming to bring broadband connectivity to payments grow to $12 billion –
India’s 250,000 gram panchayats 53 per cent up between 2021
and 2022
Source: investindia.gov.in

By 2026, A2A transaction value

is expected to grow close to 200
per cent to $36 billion
Source: The Hindu Business Line

Ecommerce
In The New Bharat
Our surveys explored the status
of Cash-On-Delivery (COD) in
eCommerce amidst increased usage
of digital payments.
And It’s Future
22 eCommerce in the New Bharat and it’s Future 2023 | A Report by
 Cash-On-Delivery
CHAPTER 3
(COD) insights
 Do you opt for Why / when do you Have your COD orders Are you willing to use prepaid option Under prepaid , which is your most
prepaying for your prefer using COD as a declined over the if the brand is giving you good preferred option?
orders or do you prefer mode of payment? years? discounts on your order?
COD?
Willingness to Prepay if discount is Most preferred Prepay option
available
3%
Preference - COD or Use of COD - When? COD orders declined 12% 4%
Prepayment over the years?

24% 29% 41%

16% 31%
26% 88%
57%

4% 5%
5%
Yes No Wallet UPI Netbanking Credit Card
76% 35% 43% Source: SHIPROCKET Consumer survey Dabit Card
COD Prepaid Shopping for the first time
Yes No
Cash is more comfortable
Others (Do not/never used COD)
Scared of fraud I do not use The consumer are not averse to switching to Unified Payments Interface (UPI) emerged as the
wallet Unknown brand ‘Prepay’ mode of payment for a good discount most preferred ‘prepay’ option, finding favours with
on their order. 57 per cent of consumers. 31 per cent consumers
Source: SHIPROCKET Consumer survey Source: SHIPROCKET Brands survey
prefer credit card; while wallets, netbanking and
debit card together are favoured by only 12 per
cent consumers
3/4th of Indian consumers Top most reasons for using 16 per cent of brands were
prefer to ‘prepay’ for their COD – found not using Cash On
online orders 1. Little over one-third cited Delivery (COD) as a payment
‘fear of fraud’ for using COD option. Almost half of those who
2. 29 per cent use it when use it, agreed to COD orders
shopping for the first time declining for them over the
3. 26 per cent do so while years while other half disagreed A ‘good discount’ can be used to convert
buying from an unknown COD consumer into a ‘prepaid’ consumer, if We are ushering into the era of UPI.
brand required.

A large number of Indian COD is used as a mode of Brands are almost equally split
consumers prepaying for their payment when in apprehension. on whether their COD orders
online orders reflects two key The fear of fraud, first time online have declined over the years or
trends – shopping and buying an unknown not. Declined or not declined,
1. Increased Trust in online brand (buying the brand for the COD remains in use as one of the
shopping, which has become first time), all represent feeling of payment options.
more frequent now ambiguity and/or lack of trust in
2. Non-cash payment methods online shopping.
finding increased usage
among online shoppers

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 UPI era
Thanks to technology advancement, the success of UPI in
UPI has become one of the most widely used India is changing consumers payment preferences faster
default payment options in India. While cash than anyone could have predicted. UPI gives consumers
is still there, increasingly, a majority of peer-to- the ability to transfer funds without any hassles any time
peer transactions are done using this platform. constraints. The success of consumers opting for UPI
payments indicate that they are looking for convenience
UPI reportedly grew 427 per cent in transaction and control at the checkout.
volume between March 2020 and August 2022.
Its seamless interoperability across commercial It is driving consumers away from cash and helping
wallets such as Google Pay, Paytm and PhonePe to drive financial inclusion all at the same time which
has helped digital wallets grow from 5 per cent includes India catching up on the use of digital payments
POS market share in 2019 to 35 per cent in at world stage.
2022.
The development of real-time payment schemes by other
As of January 2023, the number of banks live central banks – and, critically, the cooperation between
on UPI has increased to 385, and this number is those central banks – is also helping to fuel cross-border
expected to rise in the upcoming years. commerce, providing merchants with a significant
opportunity for growth, moving forward.

Source: The Hindu Business Line

Ecommerce
Year

2017
Y-o-Y growth in
UPI transactions
(%)

900
Transaction
value (in`)

67 billion
At the end of the CY2022, UPI’s total transaction
value stood at `125.95 trillion - up 1.75 X y-o-y, as
per the NPCI. This amount was nearly 86 per cent of
India’s GDP in FY22.
In The New Bharat
2018

2019

2020
246

67

63
1.5 trillion

2.9 trillion

4.3 trillion
At the end of the CY2023, UPI’s total transaction
volume stands on `83.75 Billion.

NPCI: National Payment Corporation of India

And It’s Future
2021 72 5.6 trillion

Source: National Informatics Center (NIC)

28 eCommerce in the New Bharat and it’s Future 2023 | A Report by

CHAPTER 4
Consumer
behaviour & expectations
 Do you prefer shopping from What is your most prominent
marketplaces or the brand websites? sales channel? Category you shop the most online?
Shopping preference - Most preferred sales channel
marketplace v/s brand website for brands %age of national consumers who ranked these
categories no. 1
29% 50% 48%
20%
Source: SHIPROCKET Consumer survey

40%

Source: SHIPROCKET Brands survey

30% 27%

20% 17%
10% 8%

0%
40% 21% Fashion & Electronics Grocery Others
Accessories

80% 10%
%age of national consumers who ranked these
Marketplace Your website categories no. 2
Marketplace platforms Brand website
Social Media Mix of 3
35%
32%
30%
25% 23%
29 per cent and 21 per cent brands picked up 20% 20%
Consumers shopping preference from marketplaces and their own websites respectively, 15%
marketplaces like Amazon, Flipkart etc. far as their most prominent sales channel. However, a
10%
outweighs shopping from brands’ websites larger share of 40 per cent brands gave thumbs up
to all channels combined together. 5%
0%
Fashion & Electronics Grocery Others
Accessories
Marketplaces emerged as the most preferred channel within eCommerce: as shopping channel for consumers
to buy, and sales channel for brands to sell their products and services. Although share of responses in favour
of brand websites remain similar in both cases, it is interesting to know that largest share of brands prefer mix
of all available channels. %age of national consumers who ranked these
categories no. 3
40%
34%
30%
30%
24%

20%
12%
10% Consumers were asked to rank their most shopped
category online. The top 3 ranked categories
0% consumers picked are fashion & accessories,
Fashion & Electronics Grocery Others
Accessories electronics and grocery, in the same order.

32 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 33
 Would you opt for a
Do you prefer WhatsApp updates for your eCommerce Most annoying delivery premium subscription
orders or to check the status on the platform / app? experience for early delivery of a
product?
Preference - Preference -
WhatsApp updates or self track for WhatsApp updates or self track for eCommerce
eCommerce orders orders (internationally)
Most annoying Most annoying delivery Opt for premium subscription

Source: SHIPROCKET Consumer survey

32% delivery experience experience (internationally) for early delivery?
Source: SHIPROCKET Consumer survey

16% 30%
41%
68% 45%
32%

45% 55%

43% 38% 55%

WhatsApp Self Tracking WhatsApp Self tracking
Delay Too many notification Delay Too many notification Yes No
Damaged goods Damaged goods
2/3rd of national consumers rely on 55 per cent of International consumers also prefer
WhatsApp for tracking their online order to have WhatsApp updates on the status of their
status order

A ‘delayed delivery’ annoys Second only to ‘delayed Despite confessing annoyance

Both national and international consumers prefer to have an update Indian consumer the most; delivery’ the ‘too many over ‘delayed delivery’ a larger
rather make-an-effort to track the order status. almost equal number of notifications’ annoys the share of Indian consumers
consumers also get put off international consumers the would still not pay for a early
when delivered ‘damaged most, with ‘damaged goods’ delivery, while 45 per cent
goods’ following closely consumers would

Although international consumer prefers to have an update on order Reservation to pay extra for early
status, the frequent, repetitive and multiple notifications via different delivery reflects the consumer’s
communication (overdoing) can be an irritant to them. Brands must be expectation from brands to make
judicious and reasonable in notifying the order status to its customers. uncompromised ‘timely delivery’ –
brand’s obvious service obligation,
deemed as ‘a given’.

34 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 35
 Your most basic expectation from
any online shopping website?
Most basic expectation from any Most basic expectation from any online
online shopping website shopping website (Internationally)

5%
4%
68%
52% 15%
4%
6%
5%
9%

2% 11%
19%
Price Delivery Timeline Trust Price Delivery Timeline Trust
Expected quality Review and ratings Brand Expected quality Review and ratings
Various combination of all

More than half of Indian consumers surveyed International consumers’ most basic expectation
cited ‘expected quality’ as their most basic is majorly a combination of all the factors asked
expectation from any online shopping site; trust though ‘expected quality’ still remains the most
and price stood second and third, respectively preferred as a single choice

Quality standards applicable to the site, products it

sells, and services it provides, together comprise the
‘Expected Quality’ aspect. Brands must focus on these
areas to cultivate consumer’s trust and loyalty.

Ecommerce
In The New Bharat
And It’s Future
36 eCommerce in the New Bharat and it’s Future 2023 | A Report by
CHAPTER 5
Consumer
remains the King
 India’s consumption power and Middle class and urbanisation will
future ahead drive consumption in the market
Consumer spending is expected to be >$4 trillion by 2030, growing at a CAGR of ~10 per cent From 62 per cent in 2021 to 78 per cent in 2030, India’s middle class will swell up and 40 per cent of Indian
owing to a massive domestic consumer expenditure and consumption market population will be urbanized – both will be the key demographic drivers of the higher domestic consumption

Other drivers of
Income Consumption ~18 per cent population will move up the
consumption
Urbanisation rate in India – 40 per cent income strata from low income leading to
Indians will be urban Indian by 2030 higher domestic consumption

GDP per capita grew at Growth in consumer Technological

a CAGR of 3.5 per cent spending is rising innovation in
(2017-21), generated faster than GDP with consumer products
greater disposable growth in GDP per Higher internet Rural and urban population (in billion) Income wise households (in million) projection
income capita penetration
1.60 350
By 2030, rural per Strong local consumer
1.40
capita consumption ecosystem 300 293
will grow to 4.3 times Evolving consumer 1.20 0.49 0.60
1.00 0.37 250
(3.5 times in urban habits 0.31
India) Increasing 0.80 200 188
0.79 0.83 0.91 0.90
Millennials and Gen Z female workforce 0.60 150 100
will form 77 per cent participation 0.40 56
of India’s population Working age majority 0.20 50 26
15
by 2030 – a major with a median age of - 0
consumption pool. 31 years in 2030 (42 Rural population Urban population
Low income Middle income High income
HH HH HH
Brand focused on Gen years in China and 40 2021 2030P
Z will benefit years in US) Source: SHIPROCKET | P: Projection
Consumer spending Policy support –
on categories of Atmanirbhar Bharat
food, housing, and Make in India
apparel, transport
and communication,
personal care is
expected to increase
~2x by 2030

India’s GDP (in $ trillion) Consumer spending as Consumer spending per capita
% of GDP (in $)
8 2030 P, 6.6 70% 2030 P, 67%
4,000
2030 P, 2,948
6 3,000
65%
2021, 3.2 2,000 2021, 1,210
4 2016, 2.3 2016, 59%
2021, 60%
60% 2016, 923
2 1,000
0 55% -

Source: SHIPROCKET | P: Projection

40 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 41
 Indian retail market Societal and cultural influence on
The Indian retail industry plays a pivotal role in driving third largest consumer market by 2030, trailing
consumer
India’s economy. It contributes 10 per cent to the only behind China and the US. This growth upswing
country’s GDP and generates employment for 8 per demonstrates the immense potential and a promising In India, societal and cultural factors significantly influence the economic and retail landscape. Festive
cent of the population. The retail sector has witnessed future of the Indian retail sector. As the country occasions fuel consumer spending, boosting both traditional retail and e-commerce sales.
remarkable growth in recent past, propelled by factors continues to develop and embrace technological
such as increasing urbanisation, a rise in disposable advancements, and make efforts to enhance
income, expanding eCommerce, improved logistics, infrastructure and consumer reach, the Indian retail
increase in product offerings, and digital accessibility industry is poised for further expansion, cementing its
for rural consumers. Presently, India is among the top position as a key driver of economic growth. Preferred categories for festive shopping (2021)
five retail markets and is expected to be the world’s
63%

India retail market size (in $ billion) 50%

2,500

2,000 1,930
27%
24%

1,500
CAGR 11%
9.6 per cent
CAGR
1,000 7.5 per cent 930
750
Apparel Home Jewellery
appliances Home Others
and furniture
500 fashion and electronics

-
2019 2022 2030 P Consumer traction and Impact on sales
brand initiatives for festivals
Source: SHIPROCKET | P: Projection eCommerce platforms
There are 700+ festivals experienced significant growth,
celebrated In India and generating a turnover of >
consumers consider festivals `76,000 Crores (Sep 22 – Oct 22)
to be auspicious occasions for
purchases The retail sector generated `1.25
Lakh Crores in revenue
Retailers/brands offer
discounts/incentives during Q3 (Oct 22 – Dec 22) observed
the festival season to drive the highest sales for most retail
higher purchases brands

42 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 43
 Tapping the potential of
CHAPTER 6
Cross-border logistics
 Cross-border logistics Elements of cross-border eCommerce
Cross-border logistics forms an integral section of the supply chain. The primary focus is on efficient
flow of products as they pass through different countries. Along with providing transportation
services, the other prominent feature is to facilitate compliance with legal and tax regulations and Cross-border eCommerce Leveraging five essential
this is important as products are shipped across international borders. globally is a multi-trillion elements is the success mantra
dollar opportunity and it for cross-border eCommerce
is ripe for disruption in
both SMBs and enterprise
businesses alike

Global eCommerce overview Localisation

Digital presence
Regulations
Markets & customers

Projected global B2C market size ($ billion)

7,000
350
6,000

5,000 4,300
4,000 Organisational Risk
3,000 readiness management
1,900
2,000 1,200 Organisational structure Foreign exchange &
991 Talent and technology currency
1,000 Local compliance and
regulatory
- Security
2022 2023 2025 P 2028 P 2030 P Fraud
Managing anti-money
laundering risks

Customer support Payments &

Global Market Vendors/partners Operations finance
Cross-border
Global B2C eCommerce market to grow to $5.9 shipping & logistics
Local payment
trillion by 2030 at a CAGR of 25 per cent (2022-30) methods
Financial operations
Share of Cross-border eCommerce in global
eCommerce market is 22 per cent

Organisations that want to gain access to billions of new

customers must weigh the opportunities, look for ways to
manage risk, reduce costs and implement technology to
provide connectivity, reduce operational complexity, and
optimize the customer experience

46 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 47
 Cross-border eCommerce value chain Domestic v/s cross-border shipment
model
Brand
(D2C/B2C) Identify the potential product to be sold cross-border
DOMESTIC SHIPMENT

Brand Shipper Pick-up Distribution Delivery Recipient

(D2C/B2C) center center center
Manufacturing Produce/source the identified product and sell it in
target market at competitive price

CROSS-BORDER SHIPMENT
Inventory Maintain sufficient inventory level as per the demand,
keeping cost in supply chain to the minimum and Inside origin country
achieve optimum delivery time
Regional /
Brand Pick-up National Origin country
Shipper
(D2C/B2C) center distribution gateway
center
eCommerce Sell product in target market via own /third-party
site/platform Inside destination country

Regional /
International
Delivery National Destination
Recipient distribution
Marketing Work on creating strong brand identity in target market, center distribution country gateway
center
center
leveraging social media and/or third-party tool

Payments Set up secure and convenient payment option and

currency exchange mechanism

Shipping Develop and manage the order fulfillment process and

execute last-mile delivery efficiently

48 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 49
 Are you selling Why not selling Which country is
Do you shop for Indian What is the most common and
internationally? internationally? your right market?
products abroad? preferred medium for you to shop
for Indian products abroad?

Selling internationally? Why not selling internationally? Right market for the brands Do you shop for Indian products Most common & preferred medium of
abroad? (Internationally) shopping Indian products
2% abroad (Internationally)
72% 31% 22%
38%
68%

Source: SHIPROCKET Consumer survey

Source: SHIPROCKET Brands survey

28% 8%
30%

62%

10%
28% 38%
31%

Yes No Hassle to ship Documentation

32%
US UK Middle east
Do not know where to start from UAE Other countries
Yes No
Shops Online
Indian websites that offer international delivery

72 per cent of the surveyed On asking the reason for not USA emerged as the most 2/3rd of international consumers shop for Indian 62 per cent international shoppers prefer shops
brands do not sell internationally going international, 38 per cent appropriate market for the products abroad (offline channel) for shopping Indian products
brands do not know how to go brands to go international, abroad. A good one-fifth of those who prefer to
about it, while rest remained followed by Middle Eastern buy online, prefers to buy from an Indian website
equally divided between ‘hassle region offering international delivery
to ship’ and ‘documentation’

Cross-border eCommerce is going Those who do not know ‘how-to- USA, India’s biggest trading Indian products stay in-demand even in international The fact that Indian products abroad are largely
to be a huge market for Indian go-about-it’ will require relevant partner, is also the most market owing to large number of Indians staying being bought either from shops or Indian websites
brands and companies as large consultants, and those who face favoured international market for abroad. With them, they also carry their Indian offering international delivery, indicates that
number of them are yet to cross shipping hassle will require services eCommerce brands. The improved consumption habits and liking for Indian products to international consumer prefers a trusted and
borders of shipping enablers – fomenting bilateral and trading relations with foreign land. When Indian brands start penetrating authentic source for good quality Indian products.
and fuelling a support system global superpower will not only give overseas markets they will have ready market for In shops, the touch and feel of Indian products can
economy for eCommerce sector boost to Indian eCommerce sector their products. assure the consumers of their authenticity while in
but also provide key learning on case of online purchase, ‘Indian’ website will do that.
cross-border trade

50 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 51
 Government initiatives to promote Cross-border challenges and solutions
cross-border trade
Language, currency and cultural divide

To achieve a target of $2 trillion in exports by 2030, the Indian government launched a

new Foreign Trade Policy in March 2023. The policy will enable businesses to buy and A standalone site with plugin translation software can address the language barrier
sell products internationally without domestic transactions.
Upload items to a local marketplace and let that distributor localise the brand and products
The government has also planned to establish dedicated eCommerce hubs. Additionally for the comapny
they have also increased the value limit of courier assignments to `10 lakh per assignment
which was earlier restricted to the limit of `5 lakh. A localised (or multilingual) global website customised with copy, images, product selection
and a shopping cart specific to each region’s language, currency and culture
Canara Bank, in partnership with NPCI Bharat BillPay Ltd. (NBBL), has launched Cross
Border Inward Bill Payment services for Indians residing in Oman (Middle East). This is
the first time a public sector bank in India is offering inbound cross-border bill payments
through BBPS. Similarly, the Musandam Exchange became the first exchange house in
Oman to go live with cross-border inbound bill payments, providing Indians in Oman with Marketing in a market one doesn’t understand
a secure and convenient payment option for services back home.

The “Districts as Export Hubs” programme, designed to boost India’s export sector by Consider consumer drivers – climate, regional holidays and events, cultural attitudes, political
identifying products with export potential in each district of the country, aims at promoting sensitivities etc.
local manufacturing and export-oriented businesses by addressing bottlenecks that
hinder exports, and supporting them with necessary resources and infrastructure. Check out the competition’s strategy

The RBI has extended the Interest Equalisation Scheme for pre and post-shipment Collect leads, invest in creating audience segments and conduct A/B testing, and utilise social
rupee credit for MSME exporters until March 2024 to enhance outbound shipments. The media effectively as it knows no borders
scheme provides subsidies to exporters for pre and post-shipment Rupee Export Credit.

Pricing complexity

Understand the guaranteed landing cost (including currency conversions, shipping costs,
customs, taxes and other such costs) before Delivered Duty Paid (DDP)

Take help of duty and tax-quoting technology to calculate total landed cost based on the
product and destination country

Hire a partner with product classification service, who also owns customs brokers

Customer returns

Better personalised digital experience can help cut down goods returns as it generates
customers who make sure purchases

Use AR tools allowing customers to see products digitally before buying

Partner with a delivery firm that is equipped and experienced for international returns

52 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 53
 Logistics challenges in cross-border Logistics challenges in cross-border
eCommerce eCommerce

Multicarrier handoffs and border Cross-border eCommerce businesses have two options: Multicarrier software Other considerations which may assist companies in facing
delays make managing logistics of platforms logistics challenges:
cross-border eCommerce probably the Cross-border shipping or localised fulfillment, in order to
biggest challenge, especially when it is handle international logistics complexity. These platforms, often referred Flexibility and resilience are essential characteristics for supply
required to serve three key purpose – Cross-border is shipping from an international location to as logistics control towers, chains. Being able to adapt and adjust in real-time is crucial
Tracking orders involving significantly more paperwork than a local shipment offer valuable assistance to address changes in international trade flows, navigate
Determining liabilities for in-trade The localised fulfillment is where inventory is stocked within to companies in selecting through new regulations, cope with the impacts of disruptions
goods regions included in the cross-border strategy, and shipped suitable shipping partners, like COVID-19, manage the effects of climate change, handle
Meeting promised delivery to customers domestically from those facilities. This helps to planning optimal routes, and trade tensions, and respond to other geopolitical movements
timeframes reduce international complications. preparing parcels for export. effectively.
Additionally, they transfer the
responsibility of exporter of The effective utilization of technology can aid in reducing
record and liability elements operating costs. It also offers a comprehensive visibility across
to third parties. Moreover, the entire supply chain thus unlocking localized customer
Solution these platforms can also experiences on a global scale.
encompass the management
Go for technology with multi-carrier software platforms that allow the companies to scale of international commercial Capability to adapt to digital operations and drive actionable
operations and achieve last-mile delivery efficiency terms, such as Delivered Duty improvements from data is also important
Paid (DDP), which proves
Ally with a local logistics partner who can prepare the package for export, become the exporter beneficial in reducing basket International logistics networks need to be highly responsive
of record and assume risks abandonment and preventing to meet the growing demands of customers. This also
unexpected customer charges includes providing features like end-to-end order tracking and
Benefit from partner’s experience in regard to service levels and International Commercial upon delivery. accommodating in-flight delivery changes.
Terms (incoterms) including Delivered Duty Paid (DDP), to minimise cart abandonment
Leveraging collaboration and supplier partnerships proves to
be a successful approach in effectively handling cross-border
complexity by harnessing specialized software and expertise.

54 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 55
 Disruptions in logistics and its impact eCommerce enablers in India
India’sb logisticsb market is estimated at $435.43 India’s eCommerce logistics industry expects total An eCommerce Enabler helps the eCommerce business to go
billion in 2023 and predicted to reach $650.52 shipments reaching 4 billion in FY23, and will exceed global from local
billion by 2028, rising at a CAGR of 8.36 per cent - 10 billion shipments by FY28 at a minimum CAGR of Why not selling internationally?
Research and Markets 20 per cent – Red Seer Strategy Consultants
34% TECH ENABLER PAYMENTS LOGISTICS MARKET PLACE
31%

Since the start of the According to a PwC Consumers may take

pandemic, supply chain consumer survey report a range of actions to
disruptions have been 2023, product being out overcome the supply chain
impacting consumer of stock and being given woes such as:-
behaviour globally, and in longer than reasonable
India too. In 2022, India delivery time are among changing the brand of 34%
was amongst the three the major issues faced by product they buy
top countries where online shoppers in last Shopify Shiprocket
supply chain disruptions quarter of 2022. discontinue the product
Razorpay
were found to be most they use regularly
prevalent among both in- Over a third of the
store and online shoppers, respondents (34 per switching stores or sites
Australia and the US being cent) said to have faced SHIPROCKET, as an enabler, was
the other two countries. significant unavailability spending more on ranked among top three by the
of their favourite foods/ alternative products surveyed brands
Any disruption in supply groceries (globally 22 per
chains directly drive cent) shopping at multiple
inflation impacting sites to meet their needs
shopping behaviour. 38%
Although consumers may using comparison sites 28%
not specifically identify to look for availability
supply chain disruption
as the reason behind
their shopping woes, the
unpredictable flow of goods Source: Inc42, list covers few
can be keenly felt.

34%

Shopify Shiprocket
Razorpay

An able and competent logistics partner can make a difference. Partners with relevant Individually, logistics (38 per
and customised offerings for eCommerce brands are well-positioned to capture cent) and ease of customer
market share as well as have a stronger yield profile going forward service (34 per cent) are two
key areas in which Brands want
Enablers to come up with a
revolutionary technology. Rest
want in both

56 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 57
 Logistics partners play crucial role
What makes a logistics partner a good partner?

As our world Area of expertise Safety measures

becomes increasingly Partner’s area of expertise – Equally important is partner’s
global, cross-border transportation, warehousing, safety and security measures
eCommerce will distribution, shipping or in regard to the goods shipped
increasingly become receiving, must match with under his supervision; risk
the norm for client’s business needs covered too
shoppers across the
world.

Companies need to
do their due diligence
and invest in early Speed and technology Knowledge and
planning. Partner must be capable to experience
deliver fast and on-time, and Relevant experience of
A seamless cross- in this age of technology, destination countries and
border sales strategy must have technology-driven knowledge of local factors
can broaden systems and processes helps the client a lot
company’s client
base, increase sales
and heighten global
awareness of its
brand.

To accomplish these Coverage Cost-effective

goals, companies For cross-border logistics, In the end, it all boils down
must engage a the area partner covers to the costs involved in
reliable shipping internationally becomes of shipping and partnership;
partner utmost importance calculate ROI

Ecommerce
In The New Bharat
And It’s Future
58 eCommerce in the New Bharat and it’s Future 2023 | A Report by
CHAPTER 7
New beacons of online retail
Omnichannel | Sustainability | Rise in D2C retail
 Omnichannel has been a key milestone in Major factors driving India’s
the evolution of eCommerce omnichannel growth
Indian phygital market opportunity will be worth $1 trillion by 2030 with omnichannel, at its core,
is projected to reach $55 billion in 2027 from current $11 billionInc42 Omnichannel growth drivers
The omnichannel experience entails combining all available channels into one seamless experience for Increased internet penetration in the country produced increased internet users too, and
consumers. As for retailers, it extends an opportunity to provide increased consumer interaction and with increased usage of smart mobile phones, the online shopping got a major boost.
revenue. Omnichannel further facilitates key and insightful data collection from consumers which can When online channels got converged with offline channels, it made even more convenient
then be used to create customised offering. All this together culminates into an increase in customer for consumers to embrace omnichannel wholeheartedly.
satisfaction.
Corporate retail brands like Reliance and Tata, and many other retail brands too have
The omnichannel rise via its online component, has contributed significantly in developing retail markets been expanding their offline as well as online presence, inspiring many new entrants in
in tier 2 and 3 cities in India as well. end-consumer businesses to opt for a multichannel approach and eventually achieve
omnichannel status.

Earlier, online shopping was devoid of touch and feel factor especially in case of fashion
Why Omnichannel is unique? and lifestyle products. The omnichannel’s Buy Online Pick In-Store (BOPIS) option builds
trust factor when customer can know the product, he saw online, better in-store. Similarly,
Criteria Single channel Multichannel Omnichannel product bought online can be returned in-store adding consumer’s confidence in online
shopping.
What is it? Sale of products and Sale of products and Sale of products and
services only through a services through services happen through Omnichannel began with selective categories but with advent of retail tech, eCommerce
single channel multiple channels, not multiple channels which enablers, dark stores and varied delivery models, other categories like food delivery and
integrated though are fully integrated with groceries also got added thereby validating adoption of omnichannel across categories.
each other
Over last few decades Indian retail market has evolved into a more mature industry
What options are It features minimum Although it exhibits It offers more options, as reflected by rise of eCommerce, conceptualisation of new business and delivery
available in the channel? and limited number more options but due to with a consistent and models, growth in number of retail formats. This also aided innovation in retail, called
of options in regard non-integrated nature, it seamless experience across omnichannel.
to purchases, lacks consistency across all channels –experience
communication with channels being the key hallmark of Last but not the least, omnichannel is the best option for consumer-on-the-run who is not
customer and tracking omnichannel
only short of time to shop in stores/malls but also wants a seamless shopping experience
orders
which is also unified across channels.

What all channels are Either store or website Store, website, mobile Store, website, mobile app
involved? app (notconnected with (all connected with each
each other) other)

How is data shared No data sharing Data is channel-specific Unified data can be
across channels? shared across channels
for providing seamless
experience

How is inventory There is only one Due to involvement of Since channels are
managed? channel to manage, multiple non-integrated integrated a single
hence easy channels, inventory centralized inventory is
managed becomes made available across all
complex the channels, simplifying
its management too

62 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 63
 Sustainability in eCommerce
Does the sustainability of the product guide your Do you believe in
Sustainable eCommerce market is projected to surpass $40.75 billion by 2030 at a CAGR purchase decision? sustainable packaging?
of 15.38 per cent from 2023 to 2030. The technological innovations will help eCommerce
companies bring sustainable practices in the sectorGlobeNewswire
Purchase decision guided by Purchase decision guided Believe in sustainable
As the sustainable eCommerce market continually evolves, businesses and consumers are seen sustainability of product? by sustainability of product packaging?
being sensitive towards sustainability. To maintain a competitive advantage amidst the emerging (Internationally)?
competition, it is crucial for businesses and investors to gain a comprehensive understanding of
the industry’s dynamics. 20% 14%
30%

Source: SHIPROCKET Consumer survey

eCommerce players need to continuously work and focus on three key areas
to achieve their sustainability goals

80% 86%
Supply chain & Product & Compliance & 70%
logistics packaging CSR
Yes No Yes No Yes No

Reduce carbon footprint Increase use of Regulatory framework

biodegradable ingredients
Save fossil fuel and power Ethical business practices Indian online consumer is 70 per cent International 86 per cent of brands believe in
Explore sustainable largely sustainability-conscious; consumers also concur sustainable packaging, scoring
Maximise use of renewable packaging options Environment-friendly 80 per cent claimed so with Indian consumers on even higher than consumers
energy operations Sustainability
Reuse and recycle packaging
Manage goods shipping & material Compliance to local laws
returns sustainably One of the most sold categories online, fashion is already switching Sustainable packaging
Adopt circular economy Create consumer awareness to sustainable fashion. The companies are taking numerous options for eCommerce
Leverage innovative eco- approach initiatives, exploring new ways and raw materials to churn out long- brands –
friendly technologies lasting fashion products, with fashion consumers also embracing Recyclable boxes, shopping
sustainable concepts such as quiet fashion, fluid fashion and bags, inner packaging
gorpcore to contribute to the cause in their own way. materials, wraps, paper,
twine, labels and stickers
Biodegradable air pillows
and bubble wraps
Plantable packaging
Mycelium (root of mushroom)-
based packageing
Compostable packaging,
among others

eCommerce companies /
brands using sustainable
packaging –
Amazon, Flipkart, Patagonia,
Gucci, Pela, Allbirds, Estee
Lauder, IKEA, Veja and many
more

64 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 65
 A revolution called D2C Advantage D2C
D2C brands, due to their direct connect with
Direct-to-consumer (D2C) brands are making waves customers, are relatively better positioned to
and revolutionising Indian retail, making its presence offer personalised experience to them. What non-D2C
felt in eCommerce ecosystem. This has brought about
a major change in how a customer buys products Indian D2C market D2C businesses operate on data collection brands are missing
online. The innovations in D2C segment, seen
presently, is the outcome of India’s internet reaching
(US$ billion) and insights on consumer preferences and
behaviour. This enables them to tailor their
the remotest of areas including small towns and 80 products and services according to consumer Unlike D2C brands non-D2C brands lack direct
villages, and making the customers digitally-savvy. 60 demand, resulting in a deeper connect with connect with customers which may dilute customer
Across the categories of food, fashion, beauty, health, 60 them. This connect translates into increased experience. This can force customers to switch
electronics and even education, the D2C brands are engagement and loyalty. brands.
not only emerging fast but growing too. 40
The direct connect with customers help D2C Owing to same disconnect, product offering may
Indian D2C market is expected to grow 5x from $12 brands receive their feedback on the products. neither be improved nor tailor-made to the needs
20 12
billion in 2022 to $60 billion by 2027, registering a This helps them in improving formulations, and preferences of the consumers.
growth rate of ~40 per cent. This market comprises packaging and overall product offering.
seven key categories – personal care, apparel & 0 Since non-D2C brands have to rely on intermediaries
footwear, grocery & gourmet, jewellery, electronics, 2022 2027 P D2C channel is flexible yet controls the entire such as retailers and distributors more, they may,
health care, home décor, household supplies and journey of customer preferences – from product at times, have to compromise with their values
garden supplies. development to delivery. and priorities. This can affect the brand’s product
quality, pricing and positioning.
Indian D2C total addressable market opportunity Direct to customer implies Business wise, by cutting out margins/
is poised to cross $300 billion by 2030, growing at a new age brands selling commissions of middlemen D2C channel No data wealth and insights on consumer
CAGR of 24 per cent through present decade (2021- products and services yields higher profits, which is passed on to the preferences of non-D2C brands mean inability to
2030) customers in the form of better prices. target the right consumer.
directly to customers
This is an exciting time for D2C brands in India. An without any middlemen The brands are quick to understand online
analysis of D2C brands spanning across 6 categories trends, making them more agile in identifying
reveals that each brand took at an average 4 years to and
a developing
d de e op g new
e ggrowth segments.
o t seg e ts.
cross `100 Crores revenue, with brands in personal
care and electronics categories taking even lesser Strong digital marketing capabilities, product
time of 3 years. and packaging aligned with eCommerce supply
chain, and better understanding of eCommerce
algorithms while positioning their products
in organic searches, are few other additional
Opportunities for D2C brands in India edges that D2C brands command.

The growing Indian consumption and its eCommerce juggernaut are together creating immense
opportunities for D2C brands in the country. As internet continues to penetrate deeper among
1.4 billion people, the eCommerce penetration is expected to reach approximately 15 per cent
in next 4-5 years, adding 200 million plus more online shoppers during this tenure. The changing
consumer behaviour is also a great catalyst in fuelling expansion of D2C channel which provides
increased comfort of online shopping. As a key shift in their behaviour, the consumers are
opening up more to experimentation with new brands and niche categories, and are even willing
to pay a premium for in-demand and quality products. This has encouraged D2C brands to
increase Stock Keeping Units (SKUs) portfolio in their common inventory so that experimentation
with niche categories, which legacy brands end up ignoring, can be provided to their consumers.
At the same time, increased availability of enablers encompassing website building, logistics and
supply chain, payments, marketing etc. is also helping D2C segment evolve into an industry in
itself.

66 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 67
 D2C startup funding Barriers to growth of D2C channel
There are 346 funded D2C brands in India, of which 3 are Unicorns and 8 are Soonicorns. Legacy brands and marketplaces pose stiff competition: Legacy brands enjoy the
power of strong distribution network which penetrates deep down into the semi-urban
During Q2, 2022, funding in D2C brands increased 195 per cent compared to Q1, 2021. The segments and rural areas which D2C brands are yet to access. The price range and discounts offered
which raised major part of funding are FMCG, fashion, home décor and consumer electronics. on marketplaces make them another major competition for D2C brands.

Product differentiation and personalisation: D2C brands have either limitation or

need to put extra efforts in personalising customer experience. They are also at the risk
of their product ending up being an overlooked commodity.
Segment Funding No. of Startups Trends observed
funded High customer acquisition cost (CAC): Those who chose to be on marketplace for higher
visibility have to pay high marketing costs and commission to eCommerce platforms,
escalating their CAC.
FMCG $2.1 billion 192+ Subscription & personalisation models
are on rise
Low customer retention: Despite high CAC, the customers may still shift their loyalty in
Natural & toxic-free product offering
a market crowded by numerous brands.
hasincreased
Brands are providing more tech-enabled Challenges in logistics: The logistics of D2C brands becomes a complicated issue when
buying experiences
dealing with multiple third-party partners. The situation becomes even more challenging
Transparency in product offering is in with high Return-to-Origin (RTO) rate especially in instances of COD. Add to that,
demand connectivity issues in non-metro cities and smaller towns with poor infrastructure also
increase logistics challenges.
Fashion $1.5 billion >103 Brands are being increasingly endorsed
by celebrities
There is a major shift toward customised
offerings
Quirky & fashionable designs are in
vogue

Home décor $563 and139 More than 19 and 6, Home décor

and CE million, respectively Consumers are seeking sustainable
respectively products, and preferences are shifting to
health-aiding and ergonomic designs

CE
Affordability to own devices has
increased
Demands for electronics rising in Tier 2
and 3markets

68 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 69
 Best practices in the segment
and way forward

Product Marketing Supply chain Technology

Focus on product Use own platform to Develop a diversified Use artificial

differentiation and get customer data, supplier network intelligence to
innovation, and fill up and marketplaces and deploy effective improve consumer
white spaces in the to promote brand technology in the shopping behaviour
category visibility processes and experience

Adopt data-driven Data-led retargeting, Create regional hub- Communicate

approach in product and brand awareness and-spokes models to through own website
design and upgra- through social media improve supply chain that is appealing, with
dation based on the efficiency tempting content and
customer feedback tagline

Product pricing Localise and Use services of Exploit the power

strategy basis personalise logistics and shipping of algorithms to
competition and marketing content in Enablers for better understand changing
profitability niche markets delivery performance trends
Way forward

Improved product
development cycle
Rapid expansion of
product category
basis changing
Aim higher loyalty
and retention
Trigger more
revenue drivers
Attract
Leverage
omnichannel
capabilities
Expand in
geographies of
Embrace new
technologies and
tools
Integrate various
technologies to
Ecommerce
trends
Next level product
customisation
Develop channel
level assortment
partnerships /
sponsorships
Create co-branding
opportunities
Enhance brand
play, organically/
inorganically
Rationalise offline-
online channel mix
Just-in-Time (JIT)
improve efficiency
Build and secure
data banks In The New Bharat
recall
Consumer
segmentation
manufacturing
model
Real-time
inventory status
And It’s Future
70 eCommerce in the New Bharat and it’s Future 2023 | A Report by
CHAPTER 8
ONDC –
The game changer
 What is ONDC? ONDC juggernaut
A Global Data report in May warned of a price war that ONDC platform may trigger once it
The Open Network for Digital Commerce (ONDC) is an initiative launched by the Department matches the technological and service capabilities of companies like Amazon, Flipkart, Swiggy,
for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Zomato, and others, seeing ONDC gaining critical mass with more customers and vendors
Industry. ONDC operates as an open protocol-based network, facilitating local commerce signing up for the platform
across various sectors like mobility, grocery, food order and delivery, hotel booking,
travel etc. As an open protocol network, ONDC is accessible to any network-enabled By mid-June 23 within nine weeks of its joining ONDC, hyperlocal eCommerce firm Magicpin
application, promoting inclusivity. The primary goal of ONDC as a platform is to generate recorded 50 per cent m-o-m growth when it crossed 30,000 daily order mark on the platform;
new opportunities and counter digital monopolies. By providing support to Micro, Small, Magicpin is also building a SaaS platform for ONDC initiative
and Medium Enterprises (MSMEs) and small traders, ONDC assists them in accessing online
platforms and this has revolutionised eCommerce in India to an extent. To oversee the design As of May 23, ONDC has expanded its operations into ~240 cities in the country, while adding
and accelerate the adoption of ONDC, the government has established a nine-member >36,000 merchants
advisory council, which includes prominent figures like Nandan Nilekani from Infosys and R
S Sharma, the CEO of the National Health Authority. ONDC has launched mobility operations in 2 south Indian cities and is in talks with cab
operators to launch in at least 4 more cities

55,000 taxi cab owners are already in the network, and consumers using it for about 35,000
rides a day

ONDC aims to raise eCommerce penetration in the next two years to 25 per cent of India’s
consumer purchases, from nearly 8 per cent now, in a country of 1.4 billion people

The state-run Indian postal service, which has a network of nearly 160,000 post offices, will also
join the ONDC network to provide logistics services to small traders across the country
Key features of ONDC Source: SHIPROCKET Consumer survey

Open network Data confidentiality and privacy

ONDC, a UPI of eCommerce, seeks to democratise The platform is IT Act, 2000-compliant and also
digital or electronic commerce, moving it from a designed for compliance with the emerging Personal
platform-centric model to an open-network. It aims Data Protection Bill. ONDC takes all measures to
at promoting open networks developed on open-
sourced methodology, using open specifications and
ensure confidentiality and privacy of data in the
network. ONDC does not mandate sharing of any
Have you shopped on ONDC?
open network protocols independent of any specific transaction-level data by participants, instead works
platform. with them to publish anonymised aggregate metrics
on network performance without compromising on Ever shopped on ONDC?
confidentiality and privacy.
Level playing field . 12%
It aims to create a level playing field for eCommerce
behemoths such as Amazon, Flipkart, as well as offline Digitalisation
traders who needs protection from unfair trade It is expected to digitise the entire value chain, ONDC marketing
practices of large e-tailers. Through ONDC, merchants standardise operations, promote inclusion of must target end-
are able to save their data to build credit history and suppliers, derive efficiencies in logistics and enhance consumers in India
reach consumers. ONDC enables sellers and buyers value for consumers. 88% and engage them
to be digitally visible and transact through an open going forward, as 88
network, regardless of what platform or application per cent are yet to
they use. It also empower merchants and consumers shop on the platform
by breaking silos to form a single network driving
innovation and scale, transforming all businesses
from retail goods, food to mobility.
Yes No

74 eCommerce in the New Bharat and it’s Future 2023 | A Report by eCommerce in the New Bharat and it’s Future 2023 | A Report by 75
 Do you understand Do you believe ONDC Are you associated
what ONDC is? is going to change with ONDC?
the eCommerce
sector?

Selling internationally? ONDC will change eComm sector Associated with ONDC

50% 24% 20% 28%

Source: SHIPROCKET Brands survey

50% 76% 50%

Yes No Yes No Yes No Delibrating

Brands stand equally divided A sizeable 76 per cent of those More than half of those who
when asked if they understand who understand concept of are of the view that ONDC will
the concept of ONDC ONDC believe that it is going to change the eCommerce sector
change the eCommerce sector are, somehow, not as yet
associated with it. While 28 per
cent are already associated,
additional 21 per cent are
deliberating the association

Are there any challenges you

face while on-boarding ONDC?
Ecommerce
In response to this open-ended question, most
ONDC must address the gap:
Most brands believe in ONDC’s ability to
disrupt eCommerce sector but are still not
In The New Bharat
of those associated with ONDC claimed to have
faced no problem while on-boarding, though few
wished if process could be faster and customer
care was more responsive
associated with it.

The addressing may start from challenges

faced while on-boarding ONDC.
And It’s Future
76 eCommerce in the New Bharat and it’s Future 2023 | A Report by
 References:
State of Indian Ecommerce Q3, 2022 by Inc42

State of Indian Ecommerce Q1, 2023 by Inc42

State of Indian Ecommerce Q2, 2022 by Inc42

Future of Retail Emerging Landscape of Omnichannel and Commerce in India, June 2023 by Deloitte

February 2023 Global Consumer Insights Pulse Survey 2023: India perspective by PwC

CII-SHIPROCKET Indian D2C Report 2022 (Praxis)

Internet/portal research (Invest India, Statista, IBEF, The Indian Express, Startup News, The Hindu
Business Line, National Informatics Center, Ithink logistics, ONDC)

Financial Express: https://www.financialexpress.com/industry/the-rise-of-e-commerce-and-its-

implications-for-logistics-and-supply-chain-management/3126149/

The Hindu Business Line: https://www.thehindubusinessline.com/companies/indias-e-commerce-

market-projected-to-touch-150-b-in-2026-report/article66653508.ece

78 eCommerce in the New Bharat and it’s Future 2023 | A Report by