Indian e-commerce and consumer Internet companies raised $15.4 billion in PE/VC funding in 2022, a two-fold jump from $8.2 billion in 2020, according to EY-PeerCapital E-Commerce and Consumer Internet Trendbook 2023.
Further, $12.6 billion of this deployment was invested in H1 2022, slowing down to $2.8 billion in H2 2022. Early-stage companies accounted for 17 per cent of the PE/VC funding raised by companies in the sector, compared to 6 per cent in 2021.
The report noted that the Internet and e-commerce sector in India has emerged as one of the fastest-growing sectors in the country, with growth further accelerated by the shift in consumer behaviour post-pandemic.
KT Chandy, Partner, EY Private, said: “E-commerce and consumer Internet sector in India has been on a growth spree in the last few years, emerging as the second largest online shopper base globally. The growth momentum is expected to continue, driven by improved digital infrastructure, rise in customer base and robust government initiatives. Going forward into 2023, businesses are expected to embrace innovative methods of customer acquisition while focussing on cash creation and profitability. ”
Surabhi Marwah, Partner, EY Private, said: “The year [2023] is going to see an increased focus on Tier 2 and 3 cities to drive the exponential growth of Internet businesses. Channels such as social commerce have helped brands build a trusted and loyal customer base in these important markets that will further propel the growth trajectory of the Indian e-commerce and consumer Internet sectors. Through our annual report series, we aim to catalyse India’s positioning as one of the fastest-growing e-commerce markets worldwide.”
Ankur Pahwa, Managing Partner, PeerCapital, said: “As the financial stack goes global and our health stack expands by the day, India’s future holds massive innovation in supply chain digitisation, influencer-led social commerce, synchronisation of healthcare data, and tech infusion in agriculture and clean energy. We are confident that the e-commerce and consumer Internet sector is going to be the largest value-creator, employer, and contributor to India’s GDP and a catalyst to the ambitious vision of India@100.”