Harnessing the digital marketplace in India: Revolutionary growth, challenges and opportunities

Abstract

Digital marketplaces are disrupting the established traditional marketplace models and transforming the economy and societies in India, by providing a platform for innovations. This disruption impacts drastically the way Indians' shop, bank, work, book their holidays, and even hailing a cab. India's unique demographic dividend with 50% of the 1.2 billion population less than 25 years, rising middle class income, and the mobile and internet growth are fueling the highest e-commerce growth rate in the world. This paper analyses the revolutionary growth of digital marketplace in India based on the four key pillars of digital marketplace, namely payment landscape, logistics, mobile/ internet infrastructure and business and revenue model, and illustrates how these pillars are undergoing innovations and transformations. The paper also analyzes the key challenges to digital marketplace growth and illustrates how various organizations have made use of the unique opportunities provided by India, with appropriate examples. Entry of major players such as Alibaba and Rakuten are expected to make the online marketplace more competitive and propel India to enter into the third wave of Digital Marketplace 3.0 - the golden era of Digital Marketplace in India. The inno- vative practices, processes and models adopted by the various firms analyzed in this paper could serve as a template for digital marketplace evolution in emerging markets.