The e-commerce sector in India is experiencing a significant shift in payment methods, with alternative payments accounting for 58% of the market share. According to an analysis by GlobalData, mobile and digital wallets have become more popular than traditional payment modes, marking a “paradigmatic change” in consumer preferences and transactional behavior. Cash usage has decreased while platforms like Amazon Pay, Google Pay, and card payments have seen an increase.
The report highlights the digital transformation in India, driven by internet connectivity and a growing e-commerce ecosystem. GlobalData’s latest report notes that India’s e-commerce market is expanding due to increasing internet and smartphone penetration, as well as a growing preference for online shopping and consumer confidence in online transactions.
GlobalData also predicts that India’s e-commerce market value will grow at a compound annual growth rate (CAGR) of 20.9%, reaching $315.5 billion in 2028 from $147.5 billion in 2024. The Telecom Regulatory Authority of India reported an increase in internet subscribers to 881.3 million in December 2022.
This growth is encouraging small and medium-sized enterprises (SMEs) to enter the e-commerce space, with retailers like Flipkart, Amazon, and Myntra offering discounts and cashback during sales events like Flipkart Big Billion Days, Amazon Great Indian Sale, and Myntra Big Fashion Festival Sale.
GlobalData’s Lead Banking and Payments Analyst, Ravi Sharma, attributes the rise of alternative payments in India to factors such as demonetization in 2016 and the COVID-19 pandemic, which accelerated the shift towards digital payments. Brands like Amazon Pay and Google Pay have gained popularity among consumers and merchants, with payment cards being the second most popular e-commerce method in India.
Cash usage for online purchases has decreased, accounting for only 6.2% of the market share. E-commerce payments are expected to be boosted by government initiatives like Make in India and Startup India, as well as an increase in online shoppers.
Sharma predicts that the upward trend in e-commerce sales in India will continue in the coming years, driven by consumer preferences, improved payment infrastructure, and the popularity of alternative payment solutions dominating the e-commerce payment landscape.
