Biz activity for Shopify's Indian sellers up 9.8% to Rs 30,100 cr in 2022

Global e-commerce giant Shopify on Tuesday said that Indian merchants on its platform generated Rs 30,100 crore in business activity – which includes all buyer and seller transactions – last year, up 9.8 per cent from 2021.

As per the firm’s Shopify Entrepreneurship Index, the company’s sellers in India contributed Rs 13,900 crore to the country’s GDP in 2022, an increase of 9.6 per cent versus the previous year.

Shopify has a total seller-base of 7.9 million registered Indian Micro, Small, and Medium Enterprises (MSMEs) on its platform.

This “extraordinary growth” in India, the report says, is prompting an influx of entrepreneurs entering the market to grow their business. The report attributes this growth to India’s commitment to digital transformation and technological advancements, which have “fostered an environment conducive to promoting and enabling entrepreneurial endeavours”.

“We are a small reflection of what is happening with entrepreneurship in India today,” Bharati Balakrishnan, Director and Country Head - India and SouthEast Asia, told Business Standard. “E-commerce has now become mainstream,” she says.

India’s e-commerce market is projected to grow from $83 billion in 2022 to $185 billion in 2026, propelled by increasing unified payments interface (UPI) transactions, according to a report by global financial technology solutions provider FIS.

Nevertheless, e-commerce in India, Balakrishnan adds, is still nascent. “Where consumers spend time is where they spend money. And currently, where consumers are spending time online is very fragmented,” she says, adding, “It is still about building trust with individual consumers, who then shop more and more online, looking for things they don’t find offline. Younger consumers are looking for authentic experiences that go beyond just shopping.”

According to industry estimates, job creation in the e-commerce realm grew 10 per cent year-on-year in 2022 to 223,920 jobs.

“The first phase of e-commerce was about having a big marketplace. However, we have gone beyond that. While demand is fragmented, the future of e-commerce is connected. So, companies must have really agile supply chains to meet demand, wherever it may come from,” Balakrishnan adds.

Even as international spending with Shopify merchants in the Asia Pacific (APAC) region grew by 68 per cent in 2021, exports from Shopify’s Indian sellers declined 1.5 per cent the next year, with just 18 per cent of Indian merchants now selling cross-border online.

Regardless, as many as 70 million international buyers purchased from merchants in India on Shopify last year. “Furthermore, the platform’s Indian merchants, on an average, are now selling to as many as 10 countries using Shopify Markets,” Balakrishnan revealed. “Now, we are also starting to see brands born in India, for the world.”

VAHDAM India, she says, is one example of how brands can accelerate growth by exporting top-quality Indian products to a worldwide audience.

Indian products are often repackaged and sold by foreign companies, however, Bala Sarda, founder of VAHDAM India, capitalised on the opportunity to establish India’s largest homegrown, global wellness brand. The start-up now ships to four million customers in over 130 countries.

 “We are going to see a lot more entrepreneurs in the country focus on building indigenous brands for the world, where manufacturing in India will become a real strength for them. We are currently seeing this in fashion and lifestyle mostly,” says Balakrishnan.

To reach global audiences, she says, companies need robust technology, an efficient supply chain to ship products internationally, and proper payment gateways.

India, therefore, the report says, has further potential to capitalise on its cross-border commerce and export strategies.