India's e-commerce market is poised to grow by 84 percent to $111 billion by 2024 on the back of accelerated adoption of digital technologies amid the COVID-19 pandemic, a report by fintech firm FIS said on Wednesday.
The report noted that countries, including India, have seen a shift in consumer behaviour caused by COVID-19, and new payment trends are shown to be on the rise. FIS, in its 2021 Global Payments Report, examined current and future payment trends across 41 countries.
India's e-commerce market is projected to grow by 84 percent between now and 2024 to about $111 billion (from about $60 billion in 2020) driven by mobile shopping, which is projected to grow 21 percent annually over the next four years, the report said.
Digital wallets (40 percent) followed by credit card and debit card (15 percent each) were the most popular payment methods online in 2020. Also, purchases made with digital wallets are expected to increase their market share of online payments by 2024 to 47 percent.
Besides, 'Buy Now, Pay Later' emerged as the fastest growing online payment method in India. While it is only 3 percent of the market currently, it is projected to increase to 9 percent by 2024 based on the analysis in the report.
"The Indian e-commerce industry has witnessed a huge upsurge due to COVID-19 and there is substantial room for future growth," Phil Pomford, Worldpay Managing Director (Asia Pacific) from FIS said.
E-commerce capability is no longer limited to just traditional websites, while physical retail has blended with the digital world, he added.
"The shop floor is now in the palm of our hands, and consumers expect the same hassle-free and convenient shopping experience, whether they are purchasing in-app, through their social feeds or in the real world. Merchants will be well-positioned to be successful if they put customer experience at the heart of the checkout process," he said.
Those who position themselves with digital payments capabilities will be well-positioned to capture the next wave of growth in the retail and e-commerce market in India, Pomford said.
The report also forecasted that the Point of Sale (POS) market in India would increase by 41 percent between now and 2024 to $1,035 billion. The most popular in-store payment method is cash at 34 percent, followed by digital wallets (22 percent) and debit card payments (20 percent), it added.
The report projected that digital wallets will overtake cash as the most popular in-store payment method by 2024, accounting for 33 percent of payments.
The e-commerce market in the Asia Pacific region is expected to grow at 13 percent per annum until 2024, with the highest growth in developing countries. While China has very high e-commerce penetration and high-growth, developed, below-average growth is seen in Thailand, Hong Kong, Taiwan and South Korea.
High-growth markets include Indonesia, India, Malaysia and the Philippines with over 14 percent growth rates, while less matured, low growth markets are Japan, New Zealand, Singapore and Australia, as per the report.