India’s e-commerce market continues its rapid expansion and is forecast to increase 96 percent between 2021 and 2025 to $120 billion (USD), according to a new report by FIS. The growth is driven by mobile shopping, which is projected to grow by 21 per cent annually over the next four years, with the market forecast to increase by 84 per cent by 2024 to $111 billion.
The 2022 Global Payments Report by Worldpay from FIS examines current and future payments trends across 41 countries in 5 regions. Regarding 2021, the report found the shift to online continued with 13.9 percent growth in global e-commerce, while the 13.4 percent growth in point-of-sale (POS) transaction value reflects the steady recovery from the impacts of the COVID-19 pandemic.
“The e-commerce industry in India has witnessed strong growth over the last few years and this growth is showing no signs of slowing down,” said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS.
“The COVID-19 pandemic has brought fundamental changes in the way people shop and make their purchase decisions throughout India, and it’s now vital for merchants to provide customers with a hassle-free and convenient shopping experience. Those who offer a compelling value proposition to consumers are well positioned to thrive as India’s e-commerce market continues its dramatic growth,” he added.
The report found that digital wallets (45.4 percent) followed by debit cards (14.6 percent) and credit/charge cards (13.3 percent) were the leading e-commerce payment methods in 2021.
Digital wallets are projected to extend their lead over other e-commerce payment methods through 2025, when they are projected to account for 52.9 percent of transaction value.
Buy now, pay later is India’s fastest-growing online payment method. Currently, only 3 percent of the market, based on the analysis, it is projected to increase to 9 per cent by 2024.. BNPL is projected to rise to 8.6 percent of e-commerce market value by 2025, up from just 3 percent in 2021.
Prepaid cards, bank transfers and cash on delivery market shares are in decline and are projected to collectively comprise just 8.8 percent of e-commerce transaction value by 2025, said the report.
The FIS report found that India’s POS market is projected to increase by 28.8 percent between 2021 and 2025, when it will exceed US$1.08 trillion.
Cash was the leading in-store payment method in 2021 with 37.1 percent of transaction value, followed by digital wallets (24.8 percent), and credit/charge cards (18.1 percent).
The study also states that digital wallets are projected to overtake cash as the most popular in-store payment method by 2023 when they are projected to account for 30.8 percent of POS transaction value.