India’s e-commerce space was hit drastically at the start of Covid-19 pandemic. It was also the case for many other sectors. Although, as time progressed, it found various ways to get up on its feet, and now stands tall amid these covid challenges. Although, the question arises whether Covid is a Boon or Bane to the E-commerce Industry in India? Well, we believe that it received a positive impact even during these tough times? Let’s find out how.
E-commerce Industry’s Base in India
As of May 2020, India had the 2nd largest number of internet users in the world. Although, it was left behind by the U.S. and France in the e-commerce success. Check the table below.
| Country | No of Internet Users | Percentage of Total Population on Internet |
| India | 696 million | 40% |
| United States | 266 million | 84% |
| France | 54 million | 81% |
| China | 650 million | 48% |
Source: Wikipedia
Amazon, Flipkart, Snapdeal, Tata Cliq, Paytm Mall, and Myntra are some of the leading e-commerce marketplaces in India. In 2018, Amazon recorded the highest revenue among its peers including Flipkart. Along with these marketplaces, retail websites (mostly top brands) have also made their presence felt.
Reliance Jio also entered this market and showed promises in grocery, fintech, and online retail sectors, but have not fared well among its competitors. Considering the scope in India’s e-commerce industry, it is likely that many more big guns will enter it in the near future.
Covid’s Impact on E-commerce Businesses
According to Colliers International (property consultant), lockdown resulted in an increase of warehouses in tier-1 cities such as Mumbai, Kolkata, Bangalore, Chennai, and Delhi. Moreover, demand for essential items for same day delivery also increased. This pushed Flipkart to start Flipkart Quick (90 min delivery) in Bangalore.
The lockdown also saw a rise in page views and 4 times increase in ‘Add to Cart’ usage on Amazon. Thus, Amazon received more than double the sales. It then tied-up with Acko General Insurance to sell auto insurance online. Later on, it opened up 10 new warehouses and now it has a total of 60 warehouses in 15 states which is humongous.
Covid helped e-commerce businesses rise by 117% in essential products & services like medicines, masks, sanitizers, online consultation, grocery, food delivery, and others. As of July 2020, Flipkart surpassed 1.5 billion visits per month. Moreover, it saw 45% growth in monthly active users. In addition, it got a 30% increase in transactions per user.
According to Mehul Jobanputra (Co-founder of DesiDime.com – India’s Largest Online Shopping Community), DesiDime saw an above average response (50-90%) on sectors like online pharmacy, daily essentials, OTT platforms, food delivery, and edu-tech platforms (online courses). This shows the positive impact.
The 2021 Global Payments Report by Worldpay FIS (financial technology products & services provider) found out online shopping trends across 41 countries (including India). According to this report, e-commerce businesses have boomed in this current covid situation.
It also claims that India’s e-commerce space will be around 85% up and will reach 111 Billion Dollars by 2024. This is due to the rise in demand of contactless doorstep delivery of almost all essential products & services.
Also, it said that the use of mobiles for shopping will increase by 21% annually over the next 3-4 years with online payment preferences. The most used online payment methods last year are as follows.
| Online Payment Methods | Used in 2020 for Online Shopping Payments (in percentage) |
| Digital Wallets | 40% |
| Credit Cards | 15% |
| Debit Cards | 15% |
This tells us that businesses need to have different online payment methods as people are using it more for ease of convenience, online payment rewards, and to avoid infection in current times.
Is Covid a Boon or Bane to the E-commerce Industry in India?
As of August 2020, Kinetic Green generated Rs 100 crores in revenue by selling electric auto rickshaw and golf carts online. In 2019, its revenue was Rs 75 crores. This tells us that the covid has allowed even rare sectors like vehicles to enter the e-commerce space, and that too with fine success. Also, Nestle got a 122% rise in its online sales in the 2nd quarter of 2020-21.
Many businesses and consumers have walked into e-commerce only due to this pandemic situation. Moreover, they are liking it and willing to stay on even after the pandemic. Besides, a Grofers spokesperson confirmed that among its users, around 64% were new online grocery shoppers and 20% were e-commerce newbies.
Flipkart also got around 50% new users during the lockdown period with the highest number from tier-3 areas which were earlier not even in the picture. Additionally, it saw a triple increase in sales of laptops and desktops as compared to 2019.
Therefore, covid is definitely a boon to the e-commerce businesses, but this does not mean the end of retail businesses. This is because many still prefer to shop physically which may resume after the crisis ends.