NEW DELHI, Mar 27: India’s e-retail market is expected to scale to USD 170–190 billion by 2030, its growth engines accelerating to over 18 per cent annually, fuelled by increased discretionary spending, according to a report by Flipkart and Bain and Company.
Off the historic high of 20 per cent, the e-retail growth in 2024 slowed down to 10-12 per cent due to macroeconomic and consumption stress but the recent fiscal and monetary policy interventions are expected to drive a rebound in growth, especially from the festive period of 2025, it said.
“Long-term market fundamentals remain robust, with e-retail projected to exceed 18 per cent growth over the next six years, reaching an estimated USD 170–190 billion in gross merchandise value (GMV), with nearly 1 in 10 retail dollars spent on e-retail by 2030,” the report said.
This growth will be propelled by increased discretionary spending as India’s per capita GDP surpasses USD 3,500-4,000, a crucial tipping point unlocking discretionary and e-retail spending globally.
States in India with per capita GDP above USD 3,500 already exhibit 1.2 times higher e-retail penetration than other regions, it said.
“India has become a retail powerhouse over the last decade, ascending to the third largest retail market globally in 2024. The Indian e-retail market has surged to approximately USD 60 billion in gross merchandise value (GMV), boasting the world’s second-largest online shopper base,” the report further said.
It highlighted that India’s consumption and discretionary spending have faced headwinds in recent years, with private consumption growth slowing from 11 per cent pre-Covid (2017-19) to about 8 per cent post-Covid (2022–24).
“This decline is driven by higher inflation and a stagnation of real wages. The stress in consumption is evident in e-retail growth in 2024 being 10-12 per cent, compared to historical growth rates of over 20 per cent,” as per the report.
However, the recent fiscal and monetary policy interventions are expected to drive a rebound in e-retail growth, especially from the festive period of 2025, on account of revival in the consumption cycle.
High-frequency categories such as grocery, lifestyle, and general merchandise will drive e-retail growth, accounting for two out of every three dollars spent on e-retail by 2030. These categories are set to see a two to four-fold increase in e-retail penetration over this period.
Growth will continue to reshape India’s shopping landscape, it forecast.
User adoption is already spreading from Tier-2 to Tier-3 cities, with three in five new shoppers since 2020 coming from cities designated Tier-3 or smaller.
“This growth is unlocking access for consumers in remote, brand-starved areas, as evidenced by the 1.2 times higher e-retail shopper penetration in the Northeast compared to the rest of India. The seller base is also diversifying, with 60 per cent of new sellers since 2021 hailing from Tier-2 or smaller cities,” it said.
Quick commerce, trend-first commerce (frequent launches of trendy collections at affordable prices), and hyper-value commerce are “disruptions” that will define the next chapter of growth, the report said, adding that each of these models is at a different level of maturity.
“Together, their evolution will shape the future of India’s e-retail landscape,” it said. (PTI)
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