A new report has surfaced which states that the e-retail market in India (both online and offline channels) is expected to cross $160 billion in value by 2028, riding on factors like improved physical and digital access, and enhancing the affordability, convenience and emergence of digital ecosystems, a report revealed.
The market has reportedly witnessed strong growth post-pandemic, with an estimated value of USD 57 – USD 60 billion in 2023. This represents an annual addition of USD 8 – USD 12 billion since 2020, as per the report which was released by Bain & Company in collaboration with Flipkart.
The e-retail market has been poised to grow in the coming years, with online spending currently only 5-6 per cent of total retail spending in India, when compared with 23-24 per cent in the United States and more than 35 per cent in China, which is indicating massive headroom for growth.
Even as the online channel grows, the offline channel will continue to be crucial.
The majority of India’s retail spending (94-95 per cent) has continued to be offline, with general trade accounting for 87 per cent of the overall retail spend.
In the end, scale retailers are growing offline presence and on the other side, the online-first insurgents are adopting omnichannel strategies to grow scale.
Arpan Sheth, Partner and Global Leader of Bain’s Innovation & Design Capability Area, “Long-term fundamentals of India’s e-retail industry, including affordable data, improved logistics and fintech infrastructure and strong digital consumer ecosystems remain intact.”
In India, it has been reported that around 240 million shoppers are expected to participate in e-retail in 2023, with significant headroom to grow given that more than 60 per cent of internet users are not shopping online vs. only around 20 per cent in China and the US.
Shyam Unnikrishnan, Partner and leading member of the Consumer Products & Retail practice, at Bain & Company said, "Q-commerce platforms are revolutionising the way consumers shop for their everyday needs. Over the past year, Q-commerce orders have doubled, accounting for 40-50 per cent of India's e-grocery spend.”
The seller ecosystem in India is expanding rapidly, with twice as many sellers being added in 2022 when compared to the previous year.
Around two-thirds of these new sellers came from Tier 2+ cities and around three-fourths operate in the home, lifestyle and electronics categories, which was shown by the findings.
Sankalp Mehrotra, Vice President of Monetization, Flipkart said, "Despite the rapid growth, the headroom to grow is still tremendous. Retail media spends are only 15-20 per cent of digital ad expenditure in India, compared to 25-30 per cent in the US and 55-60 per cent in China.”
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Inputs from IANS
