Page 33 - DIY Investor Magazine | Issue 33

‘THE INDIAN ECOMMERCE INDUSTRY HAS SOARED, EVEN MORE SO AFTER A SURGE IN DIGITAL ADOPTION DURING THE PANDEMIC’
And indeed the Indian ecommerce industry has soared, even more so after a surge in digital adoption during the pandemic. Ecommerce is estimated to account for 25% of the India’s total retail market, with projections suggesting this could reach 37% by 2030. The Indian ecommerce market was estimated to be worth over $55 billion in Gross Merchandise Value in 2021. By 2030 that is expected to rise to $350 bn.7
But the key question for investors is where will all this money be spent? If Indian e-commerce consumers opt for established big name e-commerce platforms such as Amazon or Alibaba, that does not present much of an opportunity for investing in Indian equities.
However, this is not the case.
Currently, Indian government policy is to support domestic competitors in the e-commerce space. Indeed, Narendra Modi, the prime minister of India, appears to be moving in the Chinese direction of protectionist policies as he recognizes the incredible domestic potential to incubating homegrown names over global rivals.8
As a result, rather than Chinese or US firms filling the gap, increasingly local entrepreneurs are doing so. As Brookings notes: “Homegrown entrepreneurs are uniquely positioned to take advantage of the digital trade opportunity.”9
This can be seen in the huge growth in valuation of Indian e-commerce firms in recent years, as well as a flurry of initial public offerings (IPO). According to GlobalData, a total of six e-commerce companies listed in India between 2019 and 2021. In 2019, there were just two Indian e-commerce firms publicly listed. The trend is likely to continue 2022, with several major ecommerce companies expected to go public.10
There are now 20 unlisted Indian e-commerce companies with a valuation of over $1billion. Of these 20, 11 reached unicorn status in 2021.11
The wider Indian tech space is also booming beyond just e-commerce. A total of 81 unlisted Indian tech companies can be classified as unicorns, with 44 reaching this status in 2021. Last year saw India overtake United Kingdom in terms of the number of unlisted companies valued at $1 billion, sitting in third place globally.
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FMQQ NEXT FRONTIER INTERNET & ECOMMERCE ESG-S UCITS ETF - ACC
‘FMQQ can be an attractive alternative for investors who want to capture the budding opportunities in these ‘next frontier’ markets and/or complement their Chinese tech allocations and balance out their current portfolio weightings.’ - Kevin T. Carter, Founder, EMQQ
7 E-commerce Industry in India - Market Size, Opportunties, Growth (investindia.gov.in)
8 Protectionism in India: How New eCommerce Laws Will Impact Brands (scalefast.com) 9 The emerging markets e-commerce opportunity (brookings.edu)
10 Indian ecommerce IPO market to stay strong in 2022 - Verdict
11 India now has four healthtech unicorns | BusinessInsider India
12 Fintech remains the rage | BusinessInsider India
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DIY Investor Magazine · Apr 2022