Macro Factor Affecting E-Commerce Industry
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Macro-economic factors such as inflation, interest rates, unemployment, GDP, per capita income, and number of internet users all impact the e-commerce industry. When inflation is high, prices rise which can discourage purchases. Low interest rates encourage borrowing. Unemployment affects both supply and demand. GDP growth directly impacts e-commerce growth. Higher per capita income increases purchasing power. More internet users fuel e-commerce growth. Government policies aim to develop the economy and expand e-commerce access. The pandemic increased e-commerce revenue as people shopped online to avoid going out.
Macro Factor Affecting E-Commerce Industry
- 1. Macro-economic Factors affecting E-Commerce Industry Group-3 Kartik Balaji Jayant Nabhar Manish Jindal Leelakrishna Chinnareddi Jagdish Prasad Sinha Muskan Sharma
- 2. 1 Introduction to the Industry 1 2 3 4 The term e-commerce was coined back in the 1960s, with the rise of electronic commerce – the buying and selling of goods through the transmission of data – which was made possible by the introduction of the electronic data interchange. E-commerce has grown rapidly and changed significantly over the years, as such there is plenty for buyers, investors and entrepreneurs to be mindful of. Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration. E-commerce has transformed the way business is done in India. The Indian E- commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017.
- 3. 2 Inflation It is the sustained rise in the prices of products and services Interest Rate Low interest rates encourage borrowings, while high interest rates discourage borrowings Factors Affecting E-Commerce
- 4. 3 Unemployment • one of the major macroeconomic factors affecting e-commerce. • affects both the demand and supply side. GDP • GDP is the measure of the health of the economy. • E-commerce contribution to GDP has been increasing over the years. • GDP growth and decline has a direct impact on the growth of e-commerce.
- 5. 4 Per capita income is a measure of the amount of money earned per person in a nation or geographic region. The increase in purchasing power of the people of any country will also increase the e-commerce sales. India’s per capita income in FY 2020 – 1,35,050 India’s per capita income in FY 2019 – 1,26,410 Per Capita Income
- 6. Number of Internet users With the exponential growth in internet and online infrastructure in India, it was no surprise that the e-commerce market experienced a boost. 5
- 7. 6 Plays an important role in developing the country’s economy Govt of India is trying to boost the economy Easy expansion in developed countries Making E-commerce more accessible in developing countries Setting up frameworks for data leakage Government and Political factors
- 8. 7 Due to covid-19, Revenue of the E-Commerce increased Effects of Pandemic on E-Commerce Government restriction Delivery in Suburbs and Rural areas Delivery Time
- 9. 8 CONCLUSION 1 2 3 4 Even though the unemployment increased throughout the country it didn’t hamper the E-Commerce industry. As people aren’t willing to go out due to Covid-19, most of them preferred E- Commerce. As these are new internet age, E-Commerce always increases their market every year. E-commerce is of immense importance due to its contribution in the GDP of our country.