The future of e-commerce in India: Outlook 2023

Till early 2019, there were many existing factors to influence the growth of e-commerce in India like internet and mobile penetration across the length and breadth of the country, low call and data usage rates, discount by retailers and the push for Digital India. But the impact of Covid-19 and the subsequent lockdown phases thrusted the e-commerce growth to new heights in a matter of months, and many ecommerce retailers, especially D2C players, witnessed unprecedented growth during the Covid phase and many of them still continue to reap the benefits, mainly due to the ease of online shopping.

Technology too played a great role in supporting e-retailers to develop and deliver better during the pandemic period.

Will 2023 be any different from 2022, in terms of growth, offering, technology and investments for e-commerce and what would be the main factors influencing its growth in India? Here are a few radical trends that would be seen growing the indian e-commerce sector in 2023.

Online-offline mix

In B2C space, online-offline play will become inevitable. Adding offline channel will bring in three big benefits:

• Build trust & confidence in brand, esp. with online newbies
• Provide brand visibility and support trial in relevant catchments, and
• Create distributed fulfilment environment facilitating faster and cheaper deliveries

Haven’t Blinkit and Zepto spoilt us already? Such hybrid fulfilment units will also help e-commerce players to penetrate smaller cities profitably.

Perform for profitability!

“Revenue is vanity, profit is sanity and cash is king,” says Alan Miltz. Time to build a team who truly understands these words. Long haul founders will drive culture of building high growth business with high-performance mind-set. Quality of Performance Management Systems (PMS) will define sustainable growth. People cycle must be fast, outcome should rule and ‘hope is not a strategy’.

Viral & referral

Tighter fund flows and a sense of uncertainty will drive start-ups and early-stage ventures to go back to basics. Brands will exercise greater focus on creating remarkable customer experience, building bigger cohorts and incentivising a happy customer to onboard friends & family. The quality of trial and retention will get better than usual advertising, digital or otherwise. Pay your good customers to get more good customers. Remember Paypal and Dropbox?

Make friends

When two brands sell two different products to the same home, can they not build synergy? Whether it is customer acquisition or delivery and more stuff in between, there is a huge leverage available to e-commerce players, especially in B2C space. There is a big space for B2B players to facilitate collaborations among smaller players. Year 2023 could see emergence of collaboration and collaboration platforms to fuel responsible growth strategies.

More mergers & acquisitions!

Growth aspirations, market dominance or pure opportunity, scaling a business requires huge liquidity and investors are looking at synergetic platforms to scale their investments across geographies. Smaller regional players are already getting the chill of funding winter and will look at buyout or alliance opportunities for survival. India’s M&A activity hit all-time high of over $175 billion in 2022 and with the pandemic behind us, 2023 could see many smaller deals, especially in B2C space, both tech and consumer.

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