New Delhi, In a significant revelation, a comprehensive report jointly conducted by Bain and Co. in collaboration with Flipkart unveils the immense potential of India’s e-commerce market. Projections indicate that by 2028, the sector is poised to surpass a staggering $160 billion, showcasing a remarkable upswing from the estimated $57-$60 billion in 2023. This forecast, outlined in the report titled “How India Shops Online 2023,” attributes the surge to the intensified adoption of online shopping, particularly catalyzed by the aftermath of the COVID-19 pandemic.
Despite the notable expansion, it’s intriguing to note that e-commerce currently constitutes only 5-6% of the overall retail spending in India. This is in stark contrast to the United States, where the figure stands at 23-24%, and China, where it exceeds 35%. The report anticipates a growth rate between 17-20% in 2023, signaling a deceleration compared to the robust 25-30% witnessed during 2019-2022.
A pivotal observation is the transformative impact of the pandemic on e-retail adoption globally. While mature markets like the United States and China experienced a marginal uptick in e-retail penetration post-pandemic, India emerged as a unique case, witnessing a substantial acceleration in e-retail penetration.
The report underscores that India’s e-retail growth in the forthcoming decade will hinge on the influx of new shoppers and an augmented online spending per shopper. Notable revelations include the addition of a staggering 120 million online shoppers in India between 2019 and 2022. Furthermore, there has been a doubling of spending per customer on e-retail over this period, reflecting both heightened engagement and increased spending.
One compelling trend identified is the leadership role undertaken by customers from smaller cities, constituting seven out of ten buyers from tier-II and III cities. The Gen Z-Alpha consumer cohort emerges as a significant player, representing a third of online shoppers. This demographic diversity highlights the evolving landscape of India’s e-commerce market.
The report also sheds light on the strategic investments made by major players in the e-commerce arena, including Amazon, Flipkart, and Reliance Retail’s Ajio. Amazon, for instance, recently pledged an additional $15 billion for the Indian market by 2030, elevating its total investment in the country to an impressive $26 billion.