India's internet economy is estimated to reach $1 trillion by 2030, primarily due to e-commerce, which is expected to be worth $325 billion and rank third globally, according to industry experts. The year 2023 marked a crucial turning point for India’s e-commerce sector, with notable changes in consumer trends, technology, and regulations. InGovern Research Services, a leading corporate governance advisory firm, hosted a virtual roundtable to deliberate on the notable developments in India's e-commerce sector in 2023, with a particular focus on the essential role of customer trust in fuelling its ongoing expansion.

During the session, Siju Narayan, chief experience officer at RexEmptor Consult LLP, highlighted that quick commerce's rapid expansion could face challenges when extending across wide product categories. However, this disruptive model is poised for transformation through increased co-opetition, strategic partnerships between players, kirana stores, and larger marketplaces.

“Ultimately, quick commerce cannot be viewed in isolation from the entire retail industry's landscape,” said Narayan. He said that India's preeminent position in retail is underpinned by three key factors: rising customer purchasing power, the advancement of consumer-enabling technology, and a robust financial infrastructure. In this equation, the government's role is pivotal in nurturing an environment conducive to the retail sector's sustained growth and innovation.

“The government has done a fabulous job of digitally priming up the entire country by establishing the necessary digital and financial infrastructure. The consumer protection aspect is also top priority for them,” said Narayan.

Madhumita Mohanty, retail consultant and educator, was of the view that e-commerce growth in India is driven by mobile phone and internet penetration and increasing aspirations. This is combined with increased disposable incomes, urbanisation and UPI adoption.

“A critical growth driver is the increasing demand from Tier-II and Tier-III cities, where consumers lack access to diverse brands and products locally. E-commerce bridges this gap, enabling them to fulfil their wants,” said Mohanty. She added, “Quick commerce has shaken up the e-commerce sector as a disruptor model promising faster deliveries. As e-commerce evolves, players must cater to the changing needs of consumers across India's cities and towns.”

Srinath Sridharan, business advisor, member – governance council, Fintech Association for Consumer Empowerment was of the view in the growing Indian e-commerce, the enthusiasm for consumption warrants a measured approach.

“While capital fosters innovation, the absence of robust and proven consumer protection poses inherent risks,” said Sridharan.

He said that brand loyalties will be tested when consumers explore diverse options, a shift reflecting evolving preferences to be seen as “unloyal”. He said maintaining a responsible and sustainable consumption economy with the next two decades in mind, demands a balance between growth and safeguarding interests.

Shriram Subramanian, founder and managing director of InGovern Research Services, said as India becomes a $5 trillion economy, e-commerce will continue to annually grow at about 25 per cent per annum from $60 billion in FY2023.

“E-commerce players are benefiting from huge tailwinds,” said Subramanian. “They are responsibly enabling small and medium enterprises to sell in India and globally through their global selling programs. They continue to invest in tools and processes to enhance customer trust.”