The value e-commerce market in India is expected to touch $40 billion by 2030, up from $4 billion in 2019, driven by a rapid increase in internet user base as more Indian buyers embrace online shopping, Kearney said in a report on Tuesday.
The report ‘Value Commerce: The Next Big Leap in India Retail Market’ noted that the value e-commerce growth will be driven by demand from low-income groups, predominantly from Tier2+ and rural cities as well as increase in overall household income and relatively stable levels of savings, along with lack of adequate brick-and-mortar options.
It added that while low-income groups, predominantly from Tier2+ and rural cities drive 70% of value lifestyle demand, only 16% is online due lack of trust and resistance to online. “Pandemic has whittled away at this resistance towards online buying...Gen Z will be joining millennials as independent shoppers over next five years; their preferences towards online buying are higher,” it said.
“As retail in India bounces back from COVID, the growing number of value-conscious online shoppers is reshaping India’’s e-commerce landscape. This value segment is pegged to grow rapidly and emerge as a $215 billion-plus market by 2030,” Kearney partner Siddharth Jain said.
He added that while only 4% of this demand is today served by online channels, this will rise to 19% by 2030 creating a $40 billion market for value e-commerce in India.
The number of online shoppers is expected to grow at 17% CAGR to nearly 350 million by 2030, the rate of growth being faster in Tier 2 cities, it said.
After a pandemic-caused disruption in 2020, India’s retail market has started to grow again, it said, adding that over the next ten years, it will grow at 8.5% CAGR to reach nearly $2 trillion by 2030.
Amidst overall retail growth, the lifestyle retail consisting of discretionary categories like apparel, footwear, fashion accessories, cosmetics and home décor and furnishing will recover faster. “It will grow at a faster clip of 9% CAGR to reach $374 billion by 2030. Nearly 70% of this demand is driven by value-conscious consumers buying affordable, small ticket items. Known as value lifestyle retail, this is slated to be a $215 Bn market by 2030, driven by households earning less than ₹10 lakh per annum, and predominantly from Tier 2+ cities,” it added.
