E-commerce industry with reference to Indian market

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Meaning of e-commerce

Buying and selling of goods and services or transferring data or funds over an electronic network, through the internet or online is e-commerce or electronic commerce. E-commerce involves money, funds and data transactions.

Types of e-commerce

1.B TO B

B2b transaction is conducted between two companies, such as wholesalers and online retailers, in which the final consumer is not involved. For example: when any manufacturing company contracts with another business to provide the raw materials that are needed to manufacture a product. E.g.: eSteel.com

2.B TO C

B2C is when businesses sell their products, services or information directly to consumers. It is the retail part of e-commerce on the internet. For example, Amazon is the most notable example that dominates the B2C market.

3.C TO C

C2C is When consumers trade products, services or information with each other online through the internet. No companies are involved. For example, eBay, olx, meesho (a fashion reselling platform) are the best examples of e-commerce of C2C.

4.C TO B

C2B is the opposite of B2C model wherein, in this type of e-commerce, consumers sell their products and services online to companies. For example, job portals like TimesJobs.com or IT freelancer who demos and sells his software to a company.

Advantages of e-commerce

  1. It is convenient as there is 24/7 availability
  2. Speed of access is high as e-commerce sites run quickly
  3. E-commerce enables brands to make a wide variety of products available
  4. International and global reach as e-commerce can sell to anyone who can access the web, removing the barrier of place.
  5. Lower cost as they avoid the cost of rent, inventory and cashiers. E-commerce companies earn a much higher margin of profit.


Disadvantages of e-commerce

  1. Limited customer service as an e-commerce store may provide support during certain hours.
  2. Limited product experience as they cannot feel, touch and experience a product directly
  3. Waiting time in the shipping of the product as customers have to wait for the product to be shipped to them.
  4. E-commerce websites may have security issues as hackers can create authentic-looking websites. Credit card theft, identity theft etc remain big concerns with customers.
  5. The start-up costs of an e-commerce portal are very high.

E-commerce platforms

An e-commerce platform provides or acts as a tool that is used to manage an e-commerce business.

A few examples of e-commerce platforms include:

  1. Amazon
  2. Alibaba
  3. Myntra
  4. Walmart

E-commerce market in India

post covid-19 pandemic, due to the limited mobility of individuals, E-commerce channels have become a preferred mode of shopping. Consumers have tilted toward e-commerce. Consumer buying patterns have changed within categories including health and pharma, groceries and food delivery have grown.

India is the eighth-largest market for e-commerce. It has a revenue of US $63 billion in 2021.

Bigbasket.com is the biggest player in the Indian e-commerce market. Ajio.com and reliance digital.in are the second and third largest stores. Altogether, the top 3 stores account for 5% of online revenue in India. Swisstimehouse.com is one of the fastest-growing stores in the Indian market.

Electronics and media is the largest e-commerce segment in India, followed by fashion, food and personal care, toys and hobby and DIY; and furniture and appliances.

Growth of the e-commerce market in India

The e-commerce market depends on a number of factors, which include a push for e-commerce, smartphones use, increased internet access, digital payment and legislative reforms. The e-commerce market is expected to grow, in e-retail, travel, consumer services or online financial services due to improving data affordability, growth in consumption and innovation in financial products.

Digital India, skill India, Startup India and make in India are government initiatives that are contributing in the growth of the e-commerce industry in India.

The increase in the use of digital payment contributes to an increase in the e-commerce industry. Online payments are favoured because of their reduction in dependency on cash, and it is convenient to use as transfers are made rapidly. Due to this convenience, a greater number of people are comfortable purchasing online, digitally investing and transferring money electronically.

E-commerce boom in the Indian market

Major e-commerce companies are increasing their efforts to contribute to India’s e-commerce boom in the Indian market.

Amazon e-commerce company in India

Amazon began in the US and since its establishment in India in 2010, The e-commerce site has grown to an estimated 322.54 million visitors monthly.

Myntra e-commerce platform in India

Myntra was acquired by Flipkart in 2014. Presently, Myntra is a popular online fashion and lifestyle e-commerce company in India.

FirstCry e-commerce platform in India

Firstcry is Asia’s most prominent e-commerce portal specializing in goods for babies and early adolescent children. The website has more than 200,000 products from 5000+ manufacturers listed.


LimeRoad.com began as a women’s fashion marketplace. It is one of India’s top 15 fashion and apparel e-commerce companies.


Rediff Is an online shopping e-commerce website. Rediff is a world-class e-commerce web portal that provides entertainment, news and information.

Regulatory framework for e-commerce in India

The Indian e-commerce industry has been rapidly growing in the country, therefore, there arises a need for proper laws and a framework

There is no codified law governing e-commerce. E-commerce is governed by various laws and regulatory agencies that are applicable to various segments of e-commerce.

Information technology act,2020(IT Act)

The IT Act, of 2000 is the only cyber law in India that also governs and contains provisions related to e-commerce in India.

  • Section 84A of the IT Act cats a duty on the central government to promote e-governance and e-commerce.
  • Section 43A of IT Act contains provisions regarding data protection.
  • Section 79 of IT Amendment act,2008 includes conditions under which an intermediary is not liable for any third-party information, data or communication link made available or hosted by him.
  • Section 69 involves provisions against national security.

e-commerce companies must also comply with the information technology (reasonable security practices and procedures and sensitive data or information) rules,2011.

Intermediary websites and the content they display are governed by the intermediary rules,2011, under the IT Act.

Consumer protection act,2019 and consumer protection(e-commerce) rules, 2020

The consumer protection (e-commerce) rules provide a framework to regulate the marketing, sale and purchase of goods and services online.

The e-commerce rules apply to:

  1. All goods and services are transacted over a digital or electronic network.
  2. All models of e-commerce
  3. All e-commerce retails
  4. All forms of unfair trade practices across all e-commerce models
  5. Foreign exchange management (non-debt instruments) rules,2019

The Foreign exchange management (non-debt instruments) rules,2019 regulate e-commerce entities with foreign direct investment (FDI).

  • Legal metrology act,2009
  • Legal metrology (packaged commodity) rules,2011 state that online platforms must provide and display mandatory information about the goods, as it is required to be displayed on physical packages as well.
  • Also, any e-commerce platform must comply with and meet the standards relating to labelling and packaging that are set by the legal metrology act, of 2009.
  • Indian contract act

In e-commerce transactions, e-contracts are formed which are standard form agreements governed by the Indian contract act. Further, it governs that the terms of service, privacy policy and return policies of any online e-commerce platform must be legally binding.

Sale of goods act,1930

The sales and shipping policy of the entity on the e-commerce platform are covered under the sales of goods act,1930.

Competition act,2002

The act identifies certain areas of the e-commerce industry that are likely to fall within the purview of competition issues. Provisions under section 3, related to anti-competitive agreements and section 4 related to abuse of dominant position are applicable to e-commerce platforms.

Companies act, 2013

Registration as an e-commerce business either as a company, firm, limited liability partnership or sole proprietorship is mandatory under the companies act, 2013.

Payment and settlement systems act, 2007

For online payment receipt and expenditure for e-commerce activities, a license has to be taken from the reserve bank of India (RBI). The payment and settlement systems act,2007 (PSS Act) and settlement system regulations, 2008 regulate the payment and settlements systems.

Further, any intermediary that receives payments through electronic modes must have a Nodal Account for settling all the payments of the merchants on the online e-commerce platform.

Government initiatives for developments in the Indian e-commerce sector

  • In June 2022, amazon India signed an MOU with Manipur handloom and handicrafts development corporation limited (MHHDCL) to support the growth of artisans and weavers across the state.
  • In January 2022, Flipkart announced an expansion in its grocery services and it will offer services to 1,800 Indian cities.
  • In February 2022, amazon India launched one district one product (ODOP) bazaar on its platform to support MSMEs.
  • In April 2021, Flipkart announced a commercial alliance with Adani group to improve the company’s logistics and data centre capabilities and create about 2,500 direct jobs.
  • The department of commerce initiated an exercise and established a ‘think tank on ‘a framework for a national policy on e-commerce’ and a task force under it to consider the challenges faced in India in the digital economy and e-commerce.


 E-commerce spiked rapidly due to the covid-19 pandemic of 2020. Demography, rise in internet usage and smartphones, increasing government support and improvements in digital infrastructure are considered to be e-commerce growth drivers.

The rapid growth of e-commerce in the Indian market reflects the public’s acceptance of it. The laws for e-commerce are extremely dynamic in nature as there is no specific codified law. Hence. Any entrepreneur who wants to venture into any e-commerce business has to be well aware of legal/regulatory compliances.



By: Jhanvi Shukla, a student at University of Mumbai Law Academy.

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