The Indian e-retail market grew 25% to reach $38 billion in FY21 while the overall retail market In India shrunk by 5% along with a 7.3% contraction in the GDP, according to a Bain & Company report.
The e-retail market grew despite a two-month national lockdown and multiple prolonged disruptions in regional pockets over the year.
The rapid growth was driven by COVID-19, that caused an increased adoption of online channels, the firm said in the report titled ‘How India Shops Online 2021.’
The acceleration in e-retail was even higher in the top eight metro cities where online shopping is more common where one in three people shopped online at least once last year, it said.
“This COVID-19-induced inflection in e-retail is a global phenomenon driven by an enhanced consumer need for safety and convenience especially during elongated stay-at-home periods,” said Arpan Sheth, partner, Bain & Company..
“This has also played out in India wherein e-retailers have been the lifeline for both consumers and sellers,” he added.
“We expect the surge in penetration to sustain post stabilisation, as a similar trend has been seen globally.”
Mobiles and electronics categories witnessed a one-time growth spurt through the initial phase of the lockdown in India. Whereas, frequent-use categories such as grocery, household, and personal care saw continued acceleration, as per the findings.
As per the report, the India e-retail market is expected to grow at 30% per annum over the next five years to reach $120–$140 billion by 2026, which is expected to be higher than modern trade. This growth will be led by smaller towns, that account for four out of five new shoppers.
