NEW DELHI: India’s burgeoning e-commerce market is set to double over the next five years, driven by advances in alternative payments technologies such as e-wallets, mobile bank transfers and credit cards.
According to new data from leading payments company Worldpay, India is on track to be worth USD 104 billion by 2021, which will make it the seventh biggest e-commerce market in the world.
M-commerce is the fastest growing sector, projected to quadruple over the next four years, making up 45 per cent of all online sales.
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Indian consumers’ enthusiasm for mobile shopping is supported by the popularity of new payment methods such as e-wallets, which account for an ever-increasing share of the market. In 2017 e-wallets represented 26 per cent of all online payments, but this is set to grow to 37 per cent by 2021.
Bank transfers are the second most popular payment method with 27 per cent of the market today; this is set to increase to 34 per cent by 2021 thanks to the advance of new payment technologies.
Worldpay’s report predicts a big drop in the popularity of cash on delivery, falling from 13.5 per cent of the market today to just 3 per cent in five years. According to the report, the recent decline in cash and the rise of alternative payments are fuelled by the government’s demonetisation drive.
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The findings are published in Worldpay’s annual Global Payments Report, which analysed e-commerce spending patterns across 36 different markets on five continents.
“The country’s (India’s) demonetisation drive, coupled with a new generation of digital payment services is opening up new opportunities for a relatively high proportion of “unbanked” to make purchases online, where this was previously not possible,” the report said.
Commenting on the research, Phil Pomford, General Manager Asia-Pacific at Worldpay said: “India is one of the fastest- growing e-commerce markets in the world, and demonetisation is proving to be a strong force pushing the use of digital payments. India’s cash economy has struggled in 2017, but this has been offset by significant growth in alternative payment methods and credit cards, and their share of the market will only grow as more Indian consumers gain access to the Internet via mobile and desktop devices.”