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The past decade has practically been a whole lifetime for e-commerce in India.

Right from birth to baby steps to exponential rises to pivots to crashing halts—to even buyouts. Indian e-commerce—both in terms of Indian companies and companies that have entered India—though big on drama, still only make up 3% of India’s $650-billion retail industry.

Three percent. Why should a 3% market share matter?

Because within retail, e-commerce has occupied the limelight over the last 10 years. According to the India Brand Equity Foundation (IBEF), India has been the fastest growing market for the sector, and will grow at an almost implausible 51% rate. Plus, how entertaining is the sector? There’s Flipkart stumbling before being scooped up by international retailer Walmart; there’s Amazon entering India and capturing both the market and people’s imagination; there’s Snapdeal…

Yes, Snapdeal.

While focusing on the loss-making business that’s e-commerce—the four big e-commerce companies Flipkart, Amazon, Snapdeal and Paytm Mall raked up losses of over Rs 10,000 crore in the year ended March 2019—there are three larger stories that emerged in the past decade. From three different companies.

One of a crazy stroke of luck. Flipkart. 

One of parental support. Amazon.

And one of trying till you die. Snapdeal.

All have something in common. The existential struggle for e-commerce in India. For an industry touted to grow to $200 billion by 2027, according to global financial services company Morgan Stanley, Indian e-commerce has a long way to go. Morgan Stanley had, in 2018, predicted this $200-billion growth by 2026, but pushed it back by a year early in 2019. This was the second time it revised its estimate.

The company blamed this new revision on India’s latest Foreign Direct Investment (FDI) rules. “The new regulations released in December 2018 strive to tighten the functioning of ecommerce companies in India….We believe these regulations will pose headwinds to growth in the near term as some of the prominent companies restructure their businesses, processes and contracts, to be compliant,” Morgan Stanley said in a report.

Even without the latest FDI rules, though, it would be very hard for this fast-growing e-commerce industry to get to that $200 billion number in eight years. We wrote about this over-projection in mid-2018.

To get to that figure, the market size has to grow to 10X from its current size in a period of eight years. Possible? Sure, if you believe in pies in the sky.


Durga M Sengupta

Durga edits for The Ken Southeast Asia from Bengaluru, India. She also works closely with reporters on pitches, drafts, and ideas.

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