The value of India's e-commerce market will be US$2.039 billion by 2034. This makes it larger than that of the United States (U.S.), and second only to China.
While India accounts for less than one percent of the world's e-commerce spend today, the country's online retail market is set to grow by an astounding 28 percent per year over the next four years.
By 2020, it will be worth US$63.7 billion, according to Worldpay's latest global overview of online consumer spending and payment habits, The Global Payments Report.
This growth will be driven by a combination of technological change, rising income levels and favourable demographics, Worldpay said in a press statement on 1 November 2016.
Around 730 million people in India will be internet users by 2020, which is 250 million higher than today.
Many of these new users will be mobile-first. India is the world's fastest growing smartphone market, and also the cheapest place to access the mobile internet with data plans two times cheaper than in China.
India's average consumer spending power will increase significantly in the coming decade, with wages rising by 10 percent in 2016.
Merchants need to understand cultural expectations of India's consumers
Merchants seeking to capitalise on the opportunities in this market will need to pursue strategies that reflect the cultural expectations of India's consumers.
This is especially with regards to their preferred payment methods.
"Everything about this market - from its preferred payment methods to its unique demographic mix - demands that merchants should enter it with a tailored strategy, that meets the needs of today and tomorrow," said Ron Kalifa, Vice Chairman, Worldpay.
Worldpay's research has revealed that India's online shoppers behave very differently from their counterparts in the U.S. and China.
For example, by 2020, 39 percent of India's online shoppers will be paying for goods and services online using direct bank transfers. On the other hand, in the U.S. and China, 28 percent and 46 percent of shoppers respectively will be paying using e-wallets such as PayPal or Alipay.
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