The e-commerce transaction value in India is likely to rise from $83 billion in 2022 to nearly $150 billion in 2026 at a 16 per cent compound annual growth rate, a report showed on Wednesday.
The Philippines, Indonesia, India, Malaysia and Vietnam are projected to lead e-commerce growth in APAC through 2026, according to the FIS Global Payments Report 2023.
“India has emerged as a global payments leader, developing the next generation of real-time payments infrastructure with the Unified Payments Interface (UPI), a project of the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI),” said the report.
UPI’s dramatic success derives largely from its seamless interoperability with commercial wallets such as Google Pay, Paytm and PhonePe, it added.
Meanwhile, the global e-commerce transaction value is likely to rise from $6 trillion in 2022 to over $8.5 trillion in 2026 at a 9 per cent compound annual growth rate, according to the report.
The explosive growth in global e-commerce in the first two years of the pandemic has slightly slowed in 2022, with a 10 per cent YoY growth in global e-commerce transaction value from 2021-2022.
Despite reduced growth rates compared to the initial pandemic period, the forecast for global e-commerce remains bullish.
“All regions except Europe saw double-digit growth from 2021-2022, with the highest growth of 21 per cent in the Middle East and Africa. Markets in Latin America, the Middle East, Africa, and Southeast Asia, except for Thailand at 9 per cent, continue to be high-growth markets,” said the report.
In India, Open Network for Digital Commerce (ONDC), an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT) at Ministry of Commerce is envisioned to create a facilitative model to revolutionise digital commerce, giving greater thrust to penetration of retail e-commerce in India. Common Services Centres (CSC), under the Ministry of Electronics and IT (MeitY), said it has invested in the ONDC to promote e-commerce and logistics in rural areas.
Currently, the ONDC network has more than 40,000 sellers live in over 200 cities.
“It is for the first time that CSC has invested in an initiative like this. ONDC will democratise digital commerce by moving to an open network. The partnership will also generate employment opportunities for rural youth by enabling a last mile logistics network,” said Dinesh Tyagi, MD, CSC SPV.
However, some challenges still need to be addressed to sustain this growth.
For example, the report said the lack of digital infrastructure and financial inclusion in some emerging markets can hinder e-commerce growth.
Additionally, regulatory challenges and cross-border trade barriers can create obstacles for businesses looking to expand globally, it added.
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