Haryana, home to Gurgaon — the prosperous suburb of Delhi — has emerged as the unlikely champion of e-commerce in India, beating back heavyweights such as Mumbai, Bangalore and Delhi.
According to tax numbers — which reflect all e-commerce transactions for which payment is made online — Haryana accounted for a whopping 19.29% of all e-commerce transactions in India by value for the eight months from October 2018 to May 2019.
Maharashtra, home to India’s commercial capital Mumbai, was second, with a share of 18.03%, while Karnataka, home to India’s IT capital, was third at 14.52%.
West Bengal, home to Kolkata, was at No.4 and accounted for 10.3% of all online transactions by value.
It should be noted that these numbers capture only those e-commerce transactions for which payment is made via e-commerce platforms like Amazon, Flipkart, Makemytrip and so on. Such transactions account for nearly 100% of all e-commerce transactions in India, as buyers do not trust sellers enough to send them money directly.
The data is based on tax numbers.
Any e-commerce transaction that goes through an intermediary or platform like Flipkart, Amazon, Goibibo and so on are taxed at the hands of the platform itself, so as to ensure compliance by the sellers.
If it was left to the sellers to pay the tax, many would try to evade paying Goods and Services Tax. By forcing platforms like Flipkart and Amazon to deduct tax at source, the government ensures that smaller sellers who use these platforms are trapped in the GST net.
INTRA-STATE vs INTER-STATE
The numbers for the eight months also show interesting trends and differences between intra-state (within the state) e-commerce and inter-state (between states) transactions.
As expected, most of the sales are done with customers outside the seller’s home state.
52.18% of the total transactions by value were done between buyers and sellers sitting in different states, while 47.82% of the transactions were between buyers and sellers in the same state.
Here too, a clear trend was visible with Haryana (Gurgaon) catering more to out-of-state buyers.
In fact, Haryana accounted for a whopping 31.22% of all inter-state e-commerce transactions by value, followed by Karnataka with 15.27% and Maharashtra with 14.34%.
On the other hand, when it came to intra-state or within-the-state transactions, Maharashtra was the clear winner with around 22% share, followed by Karntaka with 14% and West Bengal with 12%. Haryana was at No.7 with a share of just 6.35%.
START-UP LAND
The above numbers give a clue about how Haryana manages to score so high in the e-commerce market share numbers.
Gurgaon is home to some of India’s top e-commerce companies such as Makemytrip. Following closely is Bangalore, Noida, Hyderabad and Chennai.