$190B E-Retail by 2030: 1 in 10 Retail Dollars Spent Online
Groceries, Lifestyle, General Merchandise
Impact Area: Digital Commerce & Consumption Shift
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Overview
India's rise as a retail powerhouse: The future of E-retail by 2025
India has firmly established itself as a major player in global retail, becoming the world’s third-largest retail market by 2024. The country’s online retail sector is now valued at around $60 billion in gross merchandise value (GMV), with India boasting the second-largest online shopper base globally.
Shifting landscape of India's E-retail
A growing number of shoppers from Tier-2 and Tier-3 cities are fueling the rise of India’sonline retail market, with a significant portion of new shoppers coming from these smallerurban area since 2020. This shift is especially impactful in underserved regions, such as theNortheast, where e-retail penetration is already 1.2 times higher than in other parts of India.Additionally, over 60% of new sellers since 2021 have emerged from Tier-2 or smaller cities. Three disruptive trends are reshaping India’s e-retail market: quick commerce, trend-firstcommerce, and hyper-value commerce. Each of these business models is evolving at adifferent pace, but together, they will define the next phase of growth for India’s onlineretail sector.
Despite facing challenges in recent years, including a slowdown in private consumptionfrom 11% pre-Covid (2017-19) to around 8% post-Covid (2022-24), India's retail sectorremains robust. This decline, driven by inflation and stagnating wages, has led to aslowdown in e-retail growth, which is expected to reach only 10%-12% in 2024, downfrom previous rates of over 20%.
Nevertheless, fiscal and monetary policies are set to boost e-retail growth starting in 2025, particularly during the festive season. With long-term fundamentals remaining strong,India’s e-retail market is projected to grow by 18% annually over the next six years, reaching$170-$190 billion in GMV by 2030. By this time, nearly one in ten retail dollars will be spentonline. The key drivers of this growth include rising discretionary spending and a surge inIndia’s per capita GDP, which is expected to surpass $3,500-$4,000—ushering in an era ofincreased consumer spending across all sectors.
Key categories such as groceries, lifestyle products, and general merchandise will drive thisgrowth, with these sectors collectively contributing to two-thirds of total e-retail spending by2030. These categories are poised for significant increases in e-retail penetration over thenext several years.
