India eCommerce: Is it the right time to explore?

During our Getting to Global Summit at eTail West this year, we were fortunate to grab a moment with one of the most effective U.S. Commercial Service International Trade Specialists who is based in the U.S. Consulate in Mumbai, Ms. Jigna Mehta.  Here she breaks down the state of ecommerce in India and the different models available to foreign merchants looking to sell into India.

Video created in partnership with Digital Era (Formerly, eTailing India)

The following is a contribution from U.S. DOC Commercial Service International Trade Specialist Jigna Mehta. Meet Jigna in person on the upcoming eCommerce Trade Mission to India in September.

There is a growing appetite for international brands and better quality foreign products amongst Indian shoppers due to rising income levels and increased awareness. Digitally connected Indian shoppers are turning to Ecommerce sites for shopping and the trend is catching up faster in tier II and III cities. Digital advertising and personalized social media marketing have been effective in creating brand awareness among Indian consumers.

eCommerce is seen as India’s fastest growing and most exciting channel for commercial transactions and is growing at an annual rate of 51%, the highest in the world.   The Ecommerce market is expected to jump from USD 30 billion in 2016 to USD 120 billion in 2020. (Source: ASSOCHAM-Forrester study paper.)

These precisely could be the reasons why Flipkart, a popular Indian ecommerce marketplace could secure funding of USD 1.4 billion from eBay, Microsoft and TenCent marking this as a landmark deal for FlipKart and for India. As a part of the deal, eBay India is being sold to FlipKart. reports that Flipkart and eBay have also signed an exclusive cross-border trade agreement to enable customers of Flipkart to gain access to the wide array of global inventory on eBay, while eBay’s customers will have access to unique Indian inventory provided by Flipkart sellers.

Interestingly, considerable numbers of Indians are also shopping in the global marketplaces and U.S., UK and China are the most popular corridors where the Indian shoppers hunt for better deals and styles.

The report titled PayPal Cross-Border Consumer Research 2016 states that while apparels, footwear and accessories are leading categories in cross-border shopping with 54% of the consumers spending on these products, consumer electronics stand second in the list, followed by cosmetics and beauty products.

Chinese retail online giant Alibaba recently invested $200 million in Indian PayTM ecommerce to grab a share of the India ecommerce.

Performance in India was the hallmark of Amazon’s post result announcement with Jeff Bezos’s assurance to invest more in technology and infrastructure to invent on behalf of customers and small and medium businesses in India.

Notably, Government of India allows 100% FDI in online retail of goods and services with “marketplace model” and it comes with many conditions and restrictions. The single brand entities with brick and mortar presence are also now allowed to sell online subject to some local content requirements. More reforms are on the way for retail and ecommerce sector as reported here

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