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India: surge in online retail

The Indian E-commerce market

India is returning to its position as one of the world ’s fastest growing major economies and one of the largest contributors of global growth, with the IMF now forecasting real GDP growth of 11.5 per cent for 2021.

Over the past three years, India has experienced rapid growth in e-commerce activity, supported by the adoption of digital payment platforms. India ’s COVID-19 lockdown restrictions have only accelerated this surge in online retail. Online sales in India grew from less than A$1.4 billion in 2010 to over A$42 billion in 2019, with a further 15-18 per cent growth in 2020.

Propelled by one of the world ’s largest — and youngest — populations, rising smartphone penetration and affordable mobile data, India ’s e-commerce market is expected to grow to A$200 billion by 2027, comprising 300-350 million shoppers. Already, 88 per cent of Indians access online platforms via their mobile devices. Consumer trends in India show an increased appetite for international brands, with health and well-being products standing out as a growth market during the COVID-19 pandemic.

E-commerce has transformed distribution channels for companies operating in Indian retail. International market leaders such as Walmart, Alibaba and Amazon are expanding their digital footprints and optimising their supply chains. Similarly, niche online marketplaces such as Nykaa and 1MG are innovating to appeal to the millions of diverse new consumers buying online for the first time.

Australian opportunities

The Australian Government is committed to securing new markets for business and is actively working under our Comprehensive Strategic Partnership with India to support a long-term upward trajectory in trade and investment.

Growth in Indian e-commerce and burgeoning internet access presents a once-in-a-decade opportunity for Australian exporters to enter the Indian market, grow their existing footprint, or test bed their products directly with consumers with minimal investment.

Australia has a respected brand reputation in India. In particular, there is strong growth potential for Australian suppliers of premium food, beverage, health and wellness, beauty, and nutraceutical products.

Whilst Australian exporters cannot sell directly through Indian e-commerce platforms, it is possible to partner with an Indian importer or seller. Austrade can assist in making these connections.

Amazon India Australian Store

In February 2020, Austrade supported the launch of a successful Australian store on Amazon India, allowing Australian exporters to sell to Indian consumers. At the time, it showcased just 12 Australian brands, but by October 2020 there were 37 on the site including Swisse, Capilano, Carman ’s, San Remo and Sand and Sky Australia.

Austrade and Amazon India are celebrating the one-year anniversary of the Australian store in February 2021, which will be marked by a rebranding of the store and several additional brand launches. Austrade has assisted a range of Australian brands to navigate their way onto Amazon India, including the requirement to appoint an importer.

With greater economic growth, connectivity and receptivity to international brands, the time is ripe for Australian exporters to take part in India ’s e-commerce revolution.

For more information about Austrade and opportunities in India visit the Austrade India Market Profile page.

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