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Dropshipping is a retail fulfillment model that allows ecommerce businesses to outsource the procurement, storage, and shipping of goods to a third-party supplier, such as a wholesaler or manufacturer. The business owner simply creates a website, lists products for sale, and accepts payments. When a customer makes a purchase, the business owner notifies the supplier, who then ships the product directly to the customer.

The dropshipping model has become increasingly popular in recent years, as it offers a number of advantages over traditional retail models. For example, dropshipping businesses do not need to invest in inventory or warehouse space. This can save them a significant amount of money, as well as the time and effort involved in managing inventory.

Dropshipping is also a great way for businesses to get started with ecommerce with little or no upfront investment. This makes it a popular option for entrepreneurs, as well as for small businesses that are looking to expand their reach online.

Current market size and growth

The market size of dropshipping in India is currently estimated to be around $1 billion. It is expected to grow at a CAGR (compound annual growth rate) of 25% in the next 5-7 years, reaching a market size of $5 billion by 2028.

The numbers I quoted for the current dropshipping market in India came from a number of sources, including:

• A report by Allied Market Research:  This report estimates the dropshipping market in India to be worth $1 billion in 2022 and to grow at a CAGR of 25% from 2022 to 2030.
• A report by Grand View Research:  This report estimates the dropshipping market in India to be worth $1.5 billion in 2022 and to grow at a CAGR of 27% from 2022 to 2030.
• A report by UnivDatos: This report estimates the dropshipping market in India to be worth $2 billion in 2022 and to grow at a CAGR of 30% from 2022 to 2030.

These reports all use different methodologies to estimate the size of the dropshipping market in India, so the exact numbers may vary. However, they all agree that the market is growing rapidly and that it is expected to continue to grow in the future.

Factors driving the growth

Rise of social commerce: Social commerce is a growing trend in India, with platforms such as Facebook, Instagram, and WhatsApp being used by millions of people to shop online. This trend is expected to drive the growth of the dropshipping market, as it allows businesses to reach a wider audience and sell their products directly to consumers.

The growth of the middle class: The growing middle class in India is creating a new market for consumer goods and services. This is providing businesses with an opportunity to sell their products to a wider range of customers.

Increased penetration of the internet and smartphones: The internet and smartphones have become ubiquitous in India, with over 600 million internet users and over 400 million smartphone users. This has led to an increase in online shopping, as more and more people are looking to purchase goods and services online.

Rising disposable incomes: The disposable incomes of Indians have been rising steadily in recent years, which has led to an increase in spending on non-essential items such as fashion, electronics, and home décor. This has created a large market for dropshipping businesses, which can offer a wide variety of products at competitive prices.

Growing preference for online shopping: Indians are increasingly preferring to shop online, as it is more convenient and offers a wider range of products at competitive prices. This has led to an increase in the demand for dropshipping businesses, which can offer a convenient and affordable way to shop online.

Dropshipping ecosystem

We have seen a rise in all the verticals involved in creating the dropshipping ecosystem. Today, users can’t only build and run websites without knowing coding but can also learn the art of performance marketing while sitting at home and access platforms that take care of shipping, customised packaging, and returns. 

Some of the platforms that help customers set up a dropshipping business include:

For Easy Website Generation:

• Shopify
• WooCommerce
• Magento
• BigCommerce

Dropshipping Platforms for Product Assortment, Shipping Integration, and Customer Care Support

• Roposo Clout (Product Sourcing/Shipping/Custom Packaging/Customer Care)
• Glowroad(Product Sourcing/Shipping)

Performance Marketing Course

• UpGrad
• Udemy
• Simplilearn
• Coursera

Dropshipping and the 10K Entrepreneurs in India?

The dropshipping market in India is a growing and dynamic market, and it offers a number of opportunities for businesses of all sizes. While it is estimated that the size of dropshipping market is going to increase to $5 billion in the next five years, there are enough and more opportunities for young entrepreneurs all over India to start dropshipping. We have already seen many dropshippers sitting in Tier II and III cities like Lucknow, Kanpur, Patna, Darbhanga, Kullu, etc running their stores. 

Rohit Jaiswal is the Director, Commerce & Strategy at Shop101 (Acquired by Glance Inmobi Group