India’s prospective surge to the top of the competitive E-Commerce industry:

Online shopping, or e-commerce, has, in recent years, witnessed an exponential increase in consumers. Currently, there are over 2 billion consumers in the world that shop online, and this figure is a steep 40% rise over the last five years, the main boom coming in due to the pandemic and the quarantine restrictions. Higher demands call for rise in supply, and it is estimated that there are close to 12 million online or digital stores in service at the moment across the globe.

China has taken the up the spotlight as the highest grossing e-commerce market in the world, with a booming industry valued at $3 trillion. This is followed by the United States of America with the industry valued at $1 trillion. There has been a consistent dominance of these two economically developed countries in the market of digital shopping.

However, recent studies and reports have shown that the Southeast Asia is a force to be reckoned with in the field, with countries like Philippines and India recording record-breaking growth in the sector of digital consumerism and online market share. India particularly has shown a massive jump in numbers over the last decade, with the market going from $14 million to around $112 million in 2024 – a 700% increase in the last 10 years and an average of 22% yearly. The growth is expected to continue at the same, if not faster, rate for the country and predictions place its e-commerce value at above $300 million by the year 2030.

As highlighted in the graphic above, the pandemic years (2020-2022) presented the steeper climb in numbers, resulting from the restrictions and the widespread panic of disease contraction. The consistency in the rise stems largely from the experience of ease and speed that online shopping offers consumers. PwC also outlines reasons such as the absence of choice or premium brands in physical stores that turn away potential customers. Comparatively cheaper pricing, special discounts and exclusive digital vouchers retain the consumers on online platforms and the social media marketing successfully promote higher purchasing rates.

Media Literacy as a factor

Digital literacy in India, thus, is a major factor in the country’s platform growth. The subcontinent has undergone major and rapid developments on several fronts, like education, sanitation, healthcare, and employment and these are promoted, encouraged, and subsidised by the government through numerous targeted schemes, amendments, campaigns, and other positive interferences. For the propagation of media literacy, the Government of India introduced the National Digital Literacy Mission (NDLM) in 2015, aiming to digitally educate over 5 million Indian citizens for the Prime Minister’s vision of a ‘Digital India’. The PMGDISHA scheme (Pradhan Mantri Gramin Digital Saksharta Abhiyan) specifically concentrated on the rural areas of the country, subsidising the sale of basic technological devices and running technical classes and courses on digital access and use.

During the announcement of the scheme in a parliamentary conference, Prime Minister Narendra Modi said, “When I say, ‘Digital India’, I mean it not only for the rich but also for the poor. That is the dream for our nation.”

The schemes and subsidies have had an immense impact on the technical adeptness of the overall Indian population and, as 2023 records show, have armed almost a million of the rural and urban populations over the last 3 years. The states of Uttar Pradesh and West Bengal show the greatest number of certification achievements with over 600,000 certifications awarded over the period specified.

In the most recent budget meeting in July of this year, Finance Minister of India Nirmala Sitharaman proposed a substantial reduction in TDS (Tax Deducted at Source) tax percentages for E-Commerce retailers and businesspeople, bringing it down from 1% to 0.01% in an effort to encourage the already rising market trends to inflate further and contribute to India’s steadily flourishing economic environment. This, says FM Sitharaman, will entice and attract foreign investors into the Indian retail market, digitally develop and educate the Indian populace, and ease regulation of income generated from retail and commercial sales.

Access to internet within the nation has also increases substantially over the years, contributing greatly to the currently seen development in online shopping facilities and consumption. While this trend of internet penetration in India is not increasing in leaps and bounds, it is showing a consistent rise with an average rise of 7% per year. Currently, over half the population has secure and consistent access to the internet and its digital facilities, the percentage being triple the 2015 record of 14.9% of population that use the internet.


The Dark Side of Exponential Digital Growth

However, an increase in e-commerce platform numbers and such impressive projections of its potential development is not necessarily a positive indication for the future. In social and physical contexts, it has been a topic of continued discourse that online shopping promotes laziness, unhealthy lifestyle, irrational and disproportionate spending, vulnerability to digital fraud, and susceptibility to addictions. While these are inherently true, the bigger concern that scholars and environmentalists speak of is the impact on the climate. Earth.org underlines the negative effect of online retail and consumption that manifests in increased plastic waste, hazardous levels of carbon emissions, rapid burning of fossil fuels and depletion of natural resources.

Concerningly vast amounts of plastic waste is one, if not the foremost, consequence of online shopping. The primary selling points of online retail are the speed, comfort and access to innumerable items across borders and boundaries. While it is commendable that this option of consumption is eliminating the restrictions that physical international borders had previously imposed on free purchasing options, this type of digital commerce increases demands for speedy shipping in large volumes.

In the graphic below, it can be seen that the most amount of plastic overall is used in packaging of products and items while the third-most common application is during transportation. The use of huge amounts of plastic is also prevalent in the manufacture of items like clothing as well, as is apparent in the numbers displayed in the graph. Mentioned previously, competitive pricing of items and platform-specific discounts and offers, while attractive and inviting, gesture towards poorer quality, cheaper materials, and substandard production in many instances.

Such large amounts of plastic are often discarded incorrectly and end up polluting the natural bodies of waters, endangering not only wildlife but also our access to clean water and natural resources. India is the third-largest producer of plastic waste in the world, following the economic super-giants China and the U.S., producing almost one-fifths of the world’s total plastic waste (approx. 7.5 million metric tons).
However, in India’s case, the cause for concern is higher, since the Mismanagement Index for the waste produced is alarmingly high, wherein almost 99% of the waste is incorrectly or inefficiently disposed of. Even if, statistically, India is in the third spot, realistically, the country’s waste and its subsequent disposal is causing the larger part of damages to the environment as we see it.

Why India should be cautious

2023 also marked another significant increase for India – population. Climbing to over 2 billion, India’s population surpassed China’s previously dominating one. This is yet another factor that supports the reason for a rise in retail and online consumption of products. Not only so, but the rising population, higher education and literacy levels, and overall developing facets of the country have incited multinational mammoths like Google and Amazon to invest heavily into furthering their reach into the country.
Piyush Goyal, Commerce Minister of India, takes a oppositional stance on the growth of E-Commerce and the subsequent heavy-handed foreign investments into the local market by saying, “I don’t see it as a matter of pride… I see it as a cause for concern.”

According to reports, Flipkart, a subcompany owned by American retail chain Walmart, boasts a claim of 48% on the E-Commerce market of India, while Amazon takes up about 26% of the market. Already, as is clear, most of the market is monopolized by international companies and investors.
CM Goyal draws attention to the act of ‘predatory pricing’, which he says pushes away opportunities for local and home-grown vendors. “There are 100 million local vendors whose livelihood depends on their businesses. But I am not wishing away E-Commerce.”

He calls for a better management by the government, awarding a fair share of the market to the foreign investors and an equal opportunity on the same platform to the national small-scale businesses to ensure balanced growth in the retail sector. A system introduced by the government that worked on such ideology is present in the Indian market in the name of Open Network for Digital Commerce (ONDC) wherein foreign companies were restricted from selling their ow products but were instead guided to only acts as a platform for local vendors. However, due to the mismanagement and various loopholes within the system as Goyal spoke of, the ONDC is not as efficient in practicality as it is in theory.

The future of E-Commerce in India and the World

The global E-Commerce market is expected to cross $45 trillion in 2030, the figure currently being around and about a whopping $7 trillion. India, specifically, is expected to climb to the position of 3rd largest E-Commerce and digital retail consumer market in the world in a couple of years. This is unavoidable and, as mentioned, opens many opportunities and innovations for the country to flourish in many sectors, even becoming evidence of its efforts to enhance its population and outputs. Still, not only for the country but for all economies, it is imperative that the climate change, conservation of environment and natural resources, and long-term effects be considered.