Empowering Change: How Low-Income Groups and Small Cities are Revolutionizing E-Commerce in India

Recent data reveals that the lowest income segment plays a crucial role in e-commerce platforms’ customer base. According to a Pahle India Foundation report titled “Assessing the Net Impact of E-commerce on Employment and Consumer Welfare in India,” individuals earning below Rs 3 lakh annually are particularly active users. The study surveyed 2,031 offline vendors, 2,062 online vendors, and 8,209 e-commerce consumers across 35 cities in 20 states and union territories.

Flipkart emerged as the leading e-commerce platform across most income groups, with 22% of the lowest income segment favoring it for purchases, especially in apparel and personal care. Amazon followed at 20%, while Meesho, Myntra, and Nykaa held smaller shares. In higher income brackets, however, usage of these platforms declined significantly.

Tier 2 cities are a major driver for the top five platforms, with 83% of respondents in these areas using Flipkart compared to 77% in tier 1 cities. E-commerce generated 15.8 million jobs, averaging nine jobs per online vendor compared to six for offline vendors. Notably, online vendors employed nearly twice as many women as their offline counterparts.

Despite these gains, funding for business-to-consumer (B2C) e-commerce has dipped significantly, from $2.39 billion in 2019 to $0.29 billion in 2023, with a modest rise to $0.39 billion in 2024.

Overall, the report provides an in-depth look at how e-commerce is reshaping India’s economy, highlighting its impact on employment and consumer welfare.

Original Story https://www.business-standard.com/india-news/low-income-groups-and-small-cities-drive-e-commerce-says-report-124082300926_1.html
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