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India’s e-commerce sector in 2024 presented a fascinating duality: robust growth tempered by mounting pressures on profitability and operational efficiency. With a reported 15–20% growth among major platforms, the sector’s evolution has been driven by technology adoption, shifting consumer behaviour, and a relentless push toward profitability. However, the year also brought its share of challenges, prompting industry players to rethink their strategies for sustained success.
The rise of demanding consumers
Indian consumers in 2024 displayed a sharp shift in expectations, driven by convenience and personalisation. “The consumer has become very demanding,” says Karan Taurani, a research analyst at Elara Capital. “They’re paying for platform fees, delivery, and even returns, which wasn’t common before. This has also contributed to platforms achieving better profitability.” He adds that searches for products have increasingly moved to e-commerce platforms, leading to higher ad revenue for companies.
Saahil Goel, CEO of Shiprocket, highlights the transformation in consumer habits, “Concepts like 10-minute deliveries or global sellers from India’s remotest regions succeeding would have been unthinkable a decade ago. Today, technology, government initiatives, and entrepreneurship have made this a reality.”
Government-backed initiatives like the Open Network for Digital Commerce (ONDC) has also played some role in driving growth. “ONDC has democratised access to digital markets, helping MSMEs thrive in a vibrant economy,” says Goel. Similarly, Marmeto founder, Shashwat Swaroop, says, “The rise of mobile-first shoppers and improved internet access in Tier II and III cities have opened up previously untapped markets, driving rapid expansion.”
Tightrope between growth and profits
Profitability was one of the most significant hurdles of 2024. While platforms like Flipkart, Amazon, and Meesho turned a corner financially, the balance between growth and profits remained precarious. “Focusing solely on profitability can curb growth, and a single-minded focus on growth can lead to unsustainable losses,” says Taurani. “Striking the right balance is essential, and many companies are now targeting 15–20% growth while improving their profitability metrics.”
The logistical challenges of reaching rural areas persisted, with rising delivery costs posing significant obstacles. “Indian e-commerce faced issues with high logistics costs and inefficiencies in rural deliveries,” notes Anuj Sawhney, MD of Swiss Military. “However, companies have been using AI and automation to optimise supply chains, ensuring faster deliveries and lower costs.”
Cybersecurity and regulatory hurdles also added to the sector’s woes. “Stricter data protection laws and the increasing complexity of cross-border trade have pushed companies to adopt advanced TradeTech solutions,” Goel points out.
Q-commerce and personalisation dominate
The quick commerce segment was one of the standout stories of the year, reshaping consumer expectations around speed and convenience. “Quick commerce is already contributing $1 billion in GMV and setting benchmarks for speed,” says Goel. Companies like Blinkit and Zepto lead the way, prompting competitors to cut lead times and enhance delivery experiences.
Platforms are also diversifying their offerings. “Adding new categories and penetrating deeper into Tier II and III cities are emerging as strong growth drivers,” adds Taurani. Meanwhile, personalisation took centre stage. “Consumers now expect tailored shopping experiences. AI-driven recommendations are influencing 84% of shoppers, making personalisation the norm,” says Swaroop.
Sustainability is emerging as another critical trend. “Brands must now align with consumer demand for transparency and eco-friendly practices,” says Krishan Agarwal, director at DigiHaat. The push for sustainable supply chains and eco-conscious packaging is no longer optional for companies that wish to stay competitive.
2025 and beyond
As the industry gears up for 2025, the emphasis on technology, efficiency, and sustainability will only grow stronger. “The next year will see AI and AR redefining the shopping experience, with virtual try-ons becoming mainstream,” expects Agarwal. Cross-border trade, supported by digital platforms and blockchain, is set to expand significantly. “India’s export market will thrive as TradeTech solutions streamline complex supply chains,” Goel adds.
Sawhney, too, remains optimistic about the future. “The rise of voice commerce and AI-driven insights will make shopping more immersive and convenient. Meanwhile, sustainability and transparency will continue to shape consumer choices, pushing companies to innovate responsibly.”
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