India has an internet user base of about 137 million as of June 2012.

[1][2]
The penetration of e-commerce is
low compared to markets like the United States and the United Kingdom but is growing
[3]
at a much faster
rate with a large number of new entrants.
[4]
The industry consensus is that growth is at an inflection
point.
[5]

Unique to India (and potentially to other developing countries), cash on delivery is a preferred payment
method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be
Cash on Delivery. Similarly, direct imports constitute a large component of online sales. Demand for
international consumer products (including long-tail items) is growing much faster than in-country supply
from authorised distributors and e-commerce offerings.
Market size and growth
India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to
$14 billion in 2012.
[1]
About 75% of this is travel related (airline tickets, railway tickets, hotel bookings,
online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million
[6]
as of 2009). India
has close to 10 million online shoppers and is growing at an estimated 30%
[7]
CAGR vis--vis a global
growth rate of 810%. Electronics and Apparel are the biggest categories in terms of sales.
Key drivers in Indian e-commerce are:
Increasing broadband Internet (growing at 20%
[8]
MoM) and 3G penetration.
[9]

Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable
incomes
Availability of much wider product range (including long tail and Direct Imports) compared to
what is available at brick and mortar retailers
Busy lifestyles, urban traffic congestion and lack of time for offline shopping
Lower prices compared to brick and mortar retail driven by disintermediation and reduced
inventory and real estate costs
Increased usage of online classified sites, with more consumer buying and selling second-hand
goods
Evolution of the online marketplace model with sites like eBay,Flipkart, Snapdeal,
Infibeam,qnetindia.in,Dealkyahai.com and Tradus. The evolution of ecommerce has come a full
circle with marketplace models taking center stage again.
India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by 2016 and
$850 Bn by 2020, estimated CAGR of 7%..
[citation needed]
According to Forrester, the e-commerce market
in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012
16.
[10]

As per "India Goes Digital",
[11]
a report by Avendus Capital, a leading Indian Investment Bank
specializing in digital media and technology sector, the Indian e-commerce market is estimated at Rs
28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion (87%) of this
market today. Online travel market in India is expected to grow at a rate of 22% over the next 4 years and
reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600
crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015.
On March 7, 2014 e-tailer Flipkart claimed it has hit $1 billion in sales, a feat it has managed to achieve
before its own target (2015).
[12]

Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$ 24 billion) by the year 2015
with both online travel and e-tailing contributing equally. Another big segment in e-commerce is
mobile/DTH recharge with nearly 1 million transactions daily by operator websites.
[citation needed]

Closures
Though the sector has witnessed tremendous growth and is expected to grow, a lot of e-commerce
ventures have faced tremendous pressure to ensure cash flows. But it has not worked out for all the e-
commerce websites. Many of them like indiaplaza.com, 21diamonds.in, allshcoolstuff.com amongst
others had to close down.
[13]

Infrastructure
There are many hosting companies working in India but most
[citation needed]
of them are not suitable for
eCommerce hosting purpose, because they are providing much less secure and threat protected shared
hosting. eCommerce demand highly secure, stable and protected hosting.
[citation needed]
Trends are changing
with some of eCommerce companies starting to offer SaaS for hosting webstores with minimal one time
costs.
There could be various methods of ecommerce marketing such as blog, forums, search engines and some
online advertising sites like Google adwords and Adroll.
India got its own version of the so-called Cyber Monday known as Great Online Shopping Festival in
December 2012, when Google India partnered with e-commerce companies including Flipkart,
HomeShop18, Snapdeal, Indiatimes shopping and Makemytrip. "Cyber Monday" is a term coined in the
USA for the Monday coming after Black Friday, which is the Friday after Thanksgiving Day.
[14]

In early June 2013, Amazon.com launched their Amazon India marketplace without any marketing
campaigns.
Funding
As of 2012, most of the e-commerce companies are yet to start making money. However, due to their
growth prospects, many venture capital firms such as Accel Partners have invested considerably. In one
of the biggest fund raising, Flipkart.com, in August 2012, raised about 822 crore (US$140 million).
Entertainment ticketing website BookMyShow.com raised 100 crore (US$17 million) investment by
Accel Partners.
[1]

On July 10, 2013, Flipkart announced it had received $200 million from existing investors Tiger Global,
Naspers, Accel Partners, and ICONIQ Capital. New investors making up the additional $160 million
include Dragoneer Investment Group, Morgan Stanley Wealth Management, Sofina, Vulcan Inc. and
more from Tiger Global.
[15]

Snapdeal - USD 50 million in April 13.
In Feb 2014, online fashion retailer Myntra.com raised $50 million from a group of investors led by
Premji Invest, the investment company floated by Azim Premji, Chairman of Wipro. May 2014 also
witnessed an acquisition of Myntra by Flipkart reportedly for Rs. 2,000 crores.
[16]

See also
Direct imports
Disintermediation
E-commerce