Is dropshipping Profitable in India [2024]

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Exploring the Profitability of Dropshipping in India

Ashutosh Ranjan

Created on

August 2, 2024

Last updated on

November 26, 2024

Written by:

Ashutosh Ranjan

Verified by:

Mohit Mishra

Is dropshipping profitable in India? This is a common question for aspiring entrepreneurs wanting to start an online store. Profitability is crucial for the sustainability of any business. In recent years, dropshipping has gained popularity globally, especially in western countries, due to its flexibility and lack of inventory stress.

India's growing economy and expanding market offer significant potential for dropshipping. The rise in internet penetration has boosted ecommerce business.

In this article, we'll explore dropshipping in India, discussing opportunities and challenges. You'll learn about the Indian market dynamics, identifying the best products and providers, and whether dropshipping is a viable option for you.

What is Dropshipping?

Dropshipping is an e-commerce business strategy in which the retailer does not keep products in stock but instead sends customer orders and shipping information to a third-party supplier. The supplier then sends the product directly to the buyer. This strategy enables the retailer to operate without storing inventory, considerably lowering overhead costs. Dropshipping is especially appealing because it involves little initial investment, making it accessible to businesses with limited capital.

The retailer's primary concentration is on marketing and customer service, while the supplier manages inventory management and shipping. This business strategy is flexible and scalable, allowing retailers to provide a diverse choice of products without the burden of inventory management. However, success in dropshipping necessitates a careful selection of reliable suppliers as well as successful marketing methods for attracting and retaining customers.

Dropshipping Market in India

The dropshipping market in India is growing rapidly, driven by increased internet access and online purchasing. As one of the world's largest e-commerce markets, India is an ideal place for businesses ready to capitalize on the dropshipping business model. With a wide and expansive consumer base, the opportunity for specialized markets is huge, allowing dropshippers to meet unique customer needs.

The market size of dropshipping in 2023 is USD 287.36 billion and is expected to grow to USD 1,253.79 billion by 2030, with a CAGR of 23.4% from 2023 to 2030. Asia dominates overall in the dropshipping market, with China being the top. India is no less behind in the run and is ranked second in Asia. India's e-commerce market is predicted to reach INR 4,416.68 billion in 2024, growing at an annual rate of 11.45% to INR 7,591.94 billion by 2029.

Global Dropshipping Market — Credit: Grandviewresearch

Why Start Dropshipping in India?

The dropshipping market in India is rapidly expanding, driven by rising internet penetration, smartphone usage, and a thriving e-commerce industry. India's e-commerce sector was worth roughly $84 billion in 2023, and it is expected to grow to $200 billion by 2026. This rapid increase creates a lucrative opportunity for dropshippers.

One of the primary benefits of dropshipping in India is the low entry barrier. Entrepreneurs can launch their businesses with little capital because they do not need to invest in inventory or warehousing.

Several reasons contribute to the beneficial atmosphere for dropshipping in India.

Internet and Smartphone Penetration: According to the TRAI's Indian Telecom Services Performance Indicators from January to March 2023, India's internet penetration in March 2023 reached 880 million users, while the number of telecom customers surpassed 1,172 million.

Growing e-commerce Market: The e-commerce business in India is quickly increasing, with big players such as Amazon, Flipkart, and Myntra leading the way. This expansion offers a favorable atmosphere for dropshipping, as consumers become more comfortable shopping online.

Youth Population: India has a huge, youthful population that is tech-savvy and eager to try new shopping experiences. This demographic is more likely to shop online and investigate a variety of product options, which benefits dropshipping businesses.

Social Media Influence: The extensive usage of social media platforms such as Instagram, Facebook, and Youtube offers dropshippers a good opportunity to market their products and reach a larger audience.

How to Start Dropshipping Business in India?

Starting a dropshipping business in India can be a profitable venture, provided you take the necessary measures. Here's a comprehensive guide to help you get started.

Market Research

Identify niche products: Select a single product category to focus on. Look for products with great demand yet little competition.

Analyze competitors: Investigate existing dropshipping companies in your selected niche to better understand their strategy and pricing.

Select a Reliable Supplier

Research Suppliers: You may identify trusted vendors using platforms such as Spocket, AliExpress, IndiaMart, and Oberlo.

Verify Supplier Credibility: Check the supplier's reviews, ratings, and product quality. Establish clear communication with potential providers.

Set Up an Online Store

Choose an e-commerce platform: Set up your online store with systems such as Shopify, WooCommerce, or BigCommerce.

Design your store: Create a visually appealing and user-friendly website. Make sure it is mobile-responsive and easy to use.

Register Your Business

Legal Requirements: Set up your firm as a sole proprietorship, partnership, or private limited company. Obtain the appropriate licenses and permits.

Tax registration: Register for Goods and Services Tax (GST) to comply with Indian tax laws.

List your products

Add product listings: Provide high-quality photographs and thorough descriptions of your products. Set competitive prices.

Optimize for SEO: Use relevant keywords to improve your product listings in search engines.

Set up Payment Gateways

Select Payment Methods: Integrate payment gateways such as PayPal, Razorpay, Instamojo, PayU, and Paytm to provide clients with several payment options.

Ensure security: Implement SSL certificates to protect customer transactions and data.

Implement marketing strategies

Social Media Marketing: Promote your items on networks such as Facebook, Instagram, and Twitter. Run tailored advertising to reach your intended audience.

Content Marketing: Create a blog or videos to provide value to your customers while driving traffic to your store.

Email Marketing: Build an email list and send newsletters, promotional offers, and product updates to keep customers engaged.

Manage orders and customer service

Order Processing: Once a customer has placed an order, forward it to your provider. The supplier will then send the merchandise directly to the consumer.

Customer Support: Provide exceptional customer service by swiftly responding to requests, accepting returns, and resolving difficulties.

Monitor and optimize

Track Performance: Use analytics tools to track your store's performance, sales, and customer behavior.

Optimize Operations: Continuously update your website, marketing initiatives, and customer service based on data and user input.

Scale your business

Increase Product Variety: Introduce new products to your store to attract more customers.

Use AR Technology: Add AR technology to your online store for a 3D view of the product for customers. This unique feature would help you scale your business.

Use Suitable Theme: Use suitable theme according to your product niche that would give a unique look, help you manage mega menu, and help you gain more successful clicks.

Automate Processes: Use automation tools to improve order processing, inventory management, and marketing.

Top Dropshipping Websites in India

Here is a list of the top dropshipping websites in India that you can use to start your dropshipping journey:

Spocket

Spocket is a dropshipping platform that connects online store owners with suppliers in the United States and Europe. It is known for its high-quality items and quick shipping alternatives.

Features

Well curated range of US and EU providers.
Integration with Shopify and WooCommerce.
Real-time inventory updates.
Automated order fulfillment.
Options include branded invoicing and white labeling.

Pricing

Starter: $39.99/month

Pro: $59.99/month

Empire: $99.99/month

Unicorn: $299.99/month

IndiaMart

IndiaMart is a leading online B2B marketplace in India, connecting buyers and providers. It has a large selection of products across multiple categories, making it a popular choice for dropshippers.

Features

Large supplier database.
Various product categories.
There are secure payment alternatives.
Ratings and feedback from suppliers have been verified.
Buyer protection scheme.

Pricing

Business Website Basic Plan - ₹ 3,800/ Pack

Shopify

Shopify is a popular e-commerce platform that provides comprehensive dropshipping possibilities through its interaction with a variety of apps and technologies. It helps users to easily set up and manage their online stores.

Features

Easy website builder.
Integration with dropshipping applications such as Oberlo and Spocket.
Themes and layouts are customizable.
Secure payment gateways.
Comprehensive analytics and reporting tools.

Pricing

Basic: ₹1,994/month

Small Team: ₹7,447/month

Advanced: ₹30,164/month

Glowroad

GlowRoad is a dropshipping platform that helps people build their own internet businesses for free. It provides a diverse selection of products acquired straight from producers.

Features

No initial investment is required.
Easy-to-use mobile application.
A wide assortment of items.
Direct sourcing from the manufacturer.
Secure payment gateways.
No registration fees or monthly charges.
Profit by selling products at a higher price than your purchase cost.

Pricing

Free

TradeIndia

TradeIndia is another major B2B platform in India that connects buyers and suppliers. It provides a diverse range of products ideal for dropshipping.

Feature

Comprehensive supplier directory.
Diverse product line.
The suppliers have been verified.
Secure payment methods.
Buyer support services.

Pricing

Not mentioned. You need to get a quote depending on type of membership and services

Oberlo

Oberlo is a dropshipping application built exclusively for Shopify users. It enables entrepreneurs to search and sell things online while automatically fulfilling orders.

Features

seamless integration with Shopify.
Extensive product catalog.
Automated order fulfillment.
Real-time inventory updates.
Competitive price

Pricing

Starter: Free

Basic: $29.90 per month

Pro: $79.90 per month

Wholesale Box

Wholesale Box is a B2B portal that provides a diverse selection of products at wholesale prices. It is great for dropshippers seeking large orders.

Features

Competitive wholesale prices.
Extensive product categories.
The minimum order quantity is flexible.
There are secure payment alternatives.
Real-time order tracking.

Pricing

Free

SaleHoo

SaleHoo is a global wholesale and dropshipping directory that connects users to verified suppliers and a diverse assortment of products. It is an excellent website for dropshippers wanting to source products from reputable vendors.

Feature

Access to certified suppliers.
A broad range of items.
Market research tools.
Secure payment methods.
Customer support services.

Pricing

Annual: $67USD

Lifetime: $127USD

Baapstore

BaapStore is a unique dropshipping platform designed specifically for the Indian market. It provides a full solution for entrepreneurs to launch their online stores without the need for inventory or an initial investment.

Feautres

No inventory or initial investment is necessary.
Easy-to-use platform for creating an online store.
A wide variety of products purchased from Indian sources.
Automated order processing and fulfillment.
Integration of multiple payment gateways.
Marketing tools and resources to help you expand your business.

Pricing

Bronze: ₹ 29,999 in first year (₹ 15,999 from 2nd year)
Gold: ₹ 59,999 in first year (₹ 15,999 from 2nd year)
Diamond: ₹ 99,999 in first year (₹ 15,999 from 2nd year)

Top Dropshipping Products in India

Now you might be wondering what products to dropship in India. Here are some of the top product categories and products under them that you can sell to start your dropshipping career

Fashion and Apparel

Fashion and clothing are evergreen segments of the Indian market. From ethnic attire to western outfits, there is always a demand for fashionable apparel.

Electronics and gadgets

With India's tech-savvy demography, electronics and gadgets are always in great demand. This category has a diverse range of products ideal for dropshipping.

Health and Beauty

Health and beauty goods are becoming increasingly popular as individuals prioritize personal care and wellness, especially post COVID. This category has a diverse selection of products for dropshipping.

Home decor and furnishings

Home décor and furnishings are becoming more popular as more individuals want to upgrade their living spaces. This category includes a variety of products that appeal to a wide range of people.

Office Supplies & Stationery

India is a corporate hub. As remote work becomes more common, the demand for office supplies and stationery has risen, creating an excellent opportunity for dropshipping.

Pet Products

Pet ownership is growing in India, resulting in a robust industry for pet products. This category has a diverse selection of pet products for dropshipping.

Challenges of Dropshipping in India

Although India offers a potential market for dropshipping, there are also some challenges related to it. Here are some of the challenges that you must be aware of while doing dropshipping in India

Supplier Reliability: One of the primary challenges in dropshipping is finding reliable suppliers who can consistently deliver high-quality products on time.
High Competition: The dropshipping market in India is becoming increasingly competitive. Thus, it makes it difficult for new entrants to stand out in the market.
Logistics and Shipping: Efficient logistics and shipping are crucial for customer satisfaction, but they can be challenging in the Indian market due to not so advanced infrastructure.
Payment Gateways and Currency: Integrating secure and reliable payment gateways can be complex, especially with multiple currencies involved.
Customer Service and Returns: Providing excellent customer service and managing returns can be difficult in a dropshipping model where the retailer has limited control over the product.
Inventory Management: Though dropshipping eliminates the need for holding inventory, managing stock levels and ensuring product availability can still pose challenges, such as real-time inventory updates from suppliers and coordinating with multiple suppliers
Marketing and Branding: It includes high marketing costs, especially for paid advertising, creating a strong online presence, and engaging content.

Future of Dropshipping

Dropshipping has a bright future in the coming years. There are the following factors that ensure a shining future of dropshipping in India.

Technological advancements

The incorporation of advanced technologies will considerably improve the dropshipping landscape in India.

AI and machine learning enable better inventory management, targeted marketing techniques, and demand forecasts.
Automation includes streamlined order processing, real-time inventory updates, and automated customer service.
Blockchain improves transparency and security in supply chain management.

Growth of E-Commerce

The fast growth of e-commerce in India will promote the expansion of dropshipping businesses.

Internet penetration is leading to increased internet access and smartphone usage.
Use of popular digital payment methods such as UPI, wallets, and credit/debit cards.
E-commerce penetrates rural areas, creating new markets for dropshipping.

Local Sourcing and Manufacturing

A change to local sourcing and manufacturing will help dropshippers in India overcome some of their logistical hurdles.

Make in India: Government measures that encourage local production and reduce reliance on imports.
Local Suppliers: Work with local suppliers to enable speedier shipment and improved quality control.
Eco-Friendly Items: There is a growing demand for sustainable and locally made items.

Increasing Entrepreneurial Interest

The dropshipping model will continue to appeal to entrepreneurs due to its low entrance barrier and low initial expenditure.

Educational tools: The availability of online courses, webinars, and tools to assist budding entrepreneurs.
Community Support: The development of online communities and forums where dropshippers can share their knowledge and experiences.
Mentorship Programs: Receive mentorship and assistance from successful dropshipping businesses.

Integration in Global Markets

Indian dropshippers are progressively integrating with worldwide marketplaces to broaden their consumer base and product offerings.

International vendors: Sourcing products from international vendors in order to provide a varied choice of products.
Cross-Border E-Commerce: Using cross-border e-commerce platforms to reach a worldwide audience.
Global shipment solutions: collaborations with international logistics companies to enable effective global shipment.

Wrap Up

To summarize, dropshipping is a profitable business in India, especially given the booming e-commerce market and increased internet penetration. While obstacles like supplier reliability, logistics, and competitiveness exist, they may be effectively addressed with the correct strategy and tools. The key to success is rigorous study, selecting the proper niche, assuring product quality, and delivering exceptional customer service.

If you're thinking about beginning a dropshipping business, platforms like Spocket provide an appealing alternative. Spocket connects you with high-quality suppliers, especially from the United States and Europe, resulting in speedier shipping times and access to premium products. Its seamless interface with major e-commerce systems, such as Shopify, simplifies store management and order fulfillment.