India’s digital landscape is buzzing with fresh momentum as the number of internet subscribers surged to 954 million by March 2024, up from 881 million a year earlier. This surge is driving a substantial shift in consumer behaviour, especially in the e-commerce sector, where alternative payment methods are reshaping the transaction scene.
Major players in the e-commerce arena, including Flipkart, Amazon, and Myntra, are capitalising on this digital explosion by offering a range of incentives. Discounts and cashback deals on platforms such as Flipkart’s Big Billion Days, Amazon’s Great Indian Sale, and Myntra’s Big Fashion Festival Sale are luring consumers into the online shopping space.
A notable trend is the preference for alternative payment solutions among online shoppers. According to GlobalData’s 2023 Financial Services Consumer Survey, alternative payment methods captured an impressive 58% of the e-commerce market in 2023. This reflects a significant departure from traditional payment modes, with mobile and digital wallets leading the charge. Popular platforms like Amazon Pay and Google Pay are riding this wave of change, as Sharma from GlobalData highlights.
Payment cards hold the second spot in online transactions, making up 25.7% of the market, with credit and charge cards being the most popular. Meanwhile, cash payments, once the cornerstone of in-store retail transactions in India, have dwindled to a mere 6.2% of online purchases.
The rise of electronic payments for pay-on-delivery orders further fuels this shift. For instance, Flipkart’s QR code Pay-On-Delivery facility allows customers to settle payments using any UPI-enabled app at the time of delivery, a convenience that’s quickly gaining traction.
Government initiatives such as “Make in India” and “Startup India” are also contributing to the e-commerce boom. “Make in India” has enabled numerous SMEs to scale up their manufacturing and tap into online sales channels both domestically and internationally, thus fuelling market growth.
Sharma’s analysis suggests that the uptrend in e-commerce sales is set to continue, driven by increasing consumer preference, advancements in payment infrastructure, and the growing acceptance of alternative payment methods. The future looks bright for India’s e-commerce sector, as these factors combine to shape a vibrant and evolving market.
