E-commerce refers to the sale of physical goods via the internet to private consumers. Increased internet penetration, usage of smartphones, foray of international retailers, and digital payments are the catalysts for the explosive growth in the sector. Demonetization and GST have provided significant impetus to the advancement and embracement of a digital economy framework.  The high growth and potential of the industry have attracted PE and VC funds, evidenced in the number and size of deals in the e-commerce sector. As many as seven start-ups attained the ‘Unicorn’ status in 2018, with a net value of over USD 1 billion (INR 6989.65 crore).  The world is undoubtedly upbeat on India’s reputation as the most profitable investment destination for e-commerce and consumer internet segments.

The e-commerce market in India is expected to grow at CAGR of 51 percent with an estimated reach of USD 120 billion (852505 crores) by 2020 from USD 38.5 billion (INR 267036 crores) in 2017. India Brand Equity Foundation (IBEF) has predicted the e-commerce market in India to reach USD 200 billion (INR 1380930 crores) by 2026.  Over 75% of buyers are expected to come from Tier-II cities in the future. Of the total retail sales in India, e-commerce has a share of 4.8%. The retail e-commerce sales are expected to show a steep rise, owing to an increase in disposable incomes and the launch of 4G networks. Fuelled by the growth in ecommerce, India’s internet economy is expected to reach USD 250 billion by 2020 from USD 125 billion in 2017. The most significant contributor to online retail sales is electronics with a share of 48%, followed by apparel at 29%. The Indian e-commerce market is expected to become the largest e-commerce market in the world by 2034, only second to the US. Such growth will be further propelled by a significant push from the government which has allocated USD 172 million (INR 11893.83 crore) to commerce and industry in the “Union Budget 2019-2020.”

We have vast experience with clients in the e-commerce sector, which enables us to devise your financial, tax, entry strategy, entity strategy, foreign direct investment strategy and regulatory strategies in an informed manner to enable your e-commerce business to derive the desired value and results.

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