By 2028, the value of e-commerce in India is estimated to exceed $160 billion. The market has grown rapidly since the epidemic, and it is expected to be worth $57-$60 billion in 2023.
Long-term foundations of India’s e-commerce business, such as affordable data, enhanced logistics and fintech infrastructure, and strong digital consumer ecosystems, remain intact, and the market is predicted to rebound to 23-25 percent growth levels by 2028, surpassing $160 billion.
Most of India’s retail spending (94-95%) remains offline, with General Trade accounting for 87 percent of total retail spend. On the one hand, large retailers are expanding their offline presence, while online-first disruptors are embracing Omni channel tactics to scale.
In India, three important drivers of e-commerce growth have emerged. Improved physical and digital access, increased affordability and convenience, and the creating of digital ecosystems are among these. This points to a lively and expansive future in India’s e-commerce market. The fourth fundamental factor, consumer wealth, has yet to be realized. As GDP per capita rises, particularly above $4,000, online purchasing is predicted to expand sharply, as spend per customer on discretionary products rises.
The relevance of catering to varied microsegments is highlighted by a shifting customer landscape. Currently, seven out of ten online shoppers live in Tier 2+ cities, and one-third of online shoppers are Gen Z. Furthermore, roughly one-third of internet shoppers are low- or low-middle-income. Several models are being created to efficiently construct, scale, and serve this diversified customer base.
In India, the seller ecosystem is likewise fast developing, with twice as many merchants added in 2022 as the previous year. Two-thirds of these new vendors are from Tier 2+ cities, and three-quarters work in the lifestyle, home, and electronics categories. More than half of all sellers are from seven cities: Delhi NCR, Surat, Jaipur, Mumbai, Bengaluru, Hyderabad, and Kolkata.
In India, the e-commerce industry is seeing the introduction of new business models to meet the needs of consumers. Quick-commerce (Q-commerce) platforms, hyper-value commerce, inspiration-led commerce (live commerce), and fast fashion are examples.
After search and social, retail media is the third major wave in digital across regions. Retail media is used by both incumbent and insurgent brands and sellers to jumpstart their growth. flywheels.
Generative AI (Gen-AI) is likewise poised to alter the e-commerce experience, with applications ranging from discovery to seller enablement, targeted marketing, customer assistance, and corporate efficiency.