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E-commerce and fintech increased in smaller cities Following COVID

In the wake of the pandemic, the e-commerce sector “witnessed a renewed push and a rapid increase in penetration,” according to the Economic Survey 2022–23. According to the survey, other factors contributing to the development included “increasing internet penetration, rise in smartphone adoption, innovation in mobile technology, and increased adoption of digital payments.” A Worldpay FIS report that was referenced in the survey predicts that the industry will expand at a rate of 18% annually.

According to the survey, Micro, Small, and Medium-Sized Enterprises (MSMEs) fared very well. According to a research by the Indian Institute of Foreign Trade, those “who implemented digital solutions did significantly better than offline MSMEs, enabling them in reaching a vast marketplace without incurring huge costs.”

Greater expansion in smaller cities

According to the Survey, urban e-commerce trends were accelerating at varying rates depending on the size of the city, according to a report by Unicommerce and Wazir Advisors. “In FY22, consumers from tier-II and tier-III cities accounted for approximately 61.3% of the total market share, up from 53.8% in FY21. According to the research, tier-II and tier-III cities generated almost twice as many orders as tier-I cities in FY22, with YoY growth rates of 92.2% and 85.2%, respectively. Tier-I cities, on the other hand, showed a significantly modest order volume growth rate of 47.2%.

The Government e-Marketplace (GeM) achieved an annual order volume of ₹1 lakh crore, the report said. The Open Network for Digital Commerce (ONDC) programme, which recently went into effect, “is also playing an important role in democratising digital payments, facilitating interoperability, and bringing down transaction costs,” according to the Survey.

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