India’s e-commerce landscape is undergoing a significant transformation, with alternative payment methods now commanding a substantial 58% share of the market in 2023. This shift, driven by the widespread adoption of mobile and digital wallets, marks a profound change in consumer preferences and transactional behavior.
The Changing Face of Indian E-Commerce: The Rise of Alternative Payments
- Mobile Wallets: Brands like Amazon Pay and Google Pay have gained prominence as alternative payment solutions among Indian consumers.
- Decline of Cash: Traditional cash payments, prevalent in in-store retail, have witnessed a sharp decline in online purchases, capturing only a 6.2% share of the market.
Payment Cards Remain Relevant
- Credit and Charge Cards: Payment cards remain the second most popular e-commerce payment method in India, accounting for a 25.7% share in 2023.
- Preferred Types: Among payment cards, credit and charge cards are the preferred types.
Driving Factors
- Digital Revolution: Increased internet connectivity and a burgeoning e-commerce ecosystem contribute to the dominance of alternative payment methods.
- Government Initiatives: Initiatives like Make in India and Start-up India further fuel the growth of e-commerce.
- Demonetization and Pandemic: Events like the 2016 demonetization and the Covid-19 pandemic accelerated the shift towards digital payments.
Promising Future
- India’s e-commerce market is on a robust trajectory, with projections indicating a 20.9% compound annual growth rate. By 2028, the market value is expected to reach 26.1 trillion Indian rupees.
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