India’s $100 Bn ecommerce market has seen a slew of changes in 2023, ranging from the entry of new players, the expansion of the Open Network for Digital Commerce (ONDC) going live and D2C brands exploring the omnichannel path for revenue growth.

While Walmart’s infusion of $600 Mn into Flipkart as a part of its mega $1 Bn round hogged the limelight towards the end of the year, Amazon put a pause on its spending in India and streamlined its workforce in line with global strategy.

The past year also saw MamaEarth, become the first publicly-traded D2C brand in India, with IPO subscribed 7.6 times amid a spiked interest from the institutional investors.

India’s two largest conglomerates, Reliance Industries and Tata Group, are also rewriting their playbooks to grab a major chunk of the burgeoning online retail industry, with the focus now shifting to clock revenues from beyond metros and Tier 1 cities.

At the same time, the government has lent its support to the ONDC to check the dominance of large players in the aggressively growing ecommerce market. The year 2024 promises to bring many of these factors into play.

The 8 Biggest Ecommerce Trends To Expect In 2024

Amazon-Flipkart Duopoly Likely To Weaken With Rise Of Meesho & Co

Despite a challenging regulatory environment, the strengthening of the D2C ecosystem and ONDC’s foray into digital commerce, marketplace giants Amazon India and Walmart-owned Flipkart have managed to capture more than 90% of the total gross merchandise value (GMV) during the peak festive sales in 2023.

Even as these giants are building strategies to operate in a far more regulated environment than before, analysts believe that the marketplaces will continue to leverage the first-mover advantage, scale in terms of user base, and distribution channels in 2024, giving them an edge over the competition.

Except for SoftBank-backed Meesho, which has made surprising leaps in terms of average month-on-month user growth, analysts predict other players will not dent the current ecommerce revenue share of Amazon and Flipkart.

D2C players or ONDC will have some impact in 2024, but only Meesho is in the position to challenge the duopoly. In April 2023, equity research firm Jefferies said that Meesho is growing faster than the overall growth rate of the ecommerce industry in India.

“Meesho had an impressive 120 Mn average monthly active users on its platform during CY22. Over the last two years, Meesho added ~100 Mn MAUs, much higher than additions by peers. Meesho scores well on all stages of an online purchase journey, including awareness (measured by app downloads), consideration (measured by MAUs) and transaction (measured by MTUs),” the Jeffries report added.

Other analysts believe Meesho’s zero commission model for sellers who offer unbranded products targeted at consumers from middle-low income households has worked for the Bengaluru-based ecommerce unicorn which has captured 7% of the ecommerce market share in India.

However, the larger question is how these giants will move beyond Tier 1 cities and metros, which have driven a majority of the revenues so far. Meesho and even the likes of JioMaart or TataNeu will have to capture underpenetrated markets, a top ecommerce industry analyst told us.

“This is especially true since Amazon and Flipkart do have control over large inventories earlier in the form of companies like Cloudtail, Appario and now private label brands. With time, if the regulators do not put an end to this structure through definitive laws, Amazon and Flipkart will build on the market........

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