India's E-Retail Market Set To Surge Past $160 Billion By 2028: Bain-Flipkart Report

(MENAFN- Live Mint) "New Delhi: India's e-commerce market is expected to vault past $160 billion by 2028, from an estimated $57–$60 billion in 2023, as online shopping has accelerated after the covid-19 pandemic, a report said. Since 2020, the country's online retail market has consistently expanded by $8–12 billion each year, according to The How India Shops Online 2023 report by Bain and Co., which tracked consumer spending on e-commerce market is projected to grow 17–20% in 2023 from a year ago, albeit at a slower pace than the 25-30% in 2019-2022, with high inflation hurting demand for discretionary goods, Bain said in a joint report with e-commerce major Flipkart.“The covid-19 pandemic has been an inflection point for e-retail adoption globally. The pandemic-induced rise in online shopping has primarily persisted across markets, but to varying degrees. In mature markets like the US and China, the annual uptick in e-retail penetration is slightly lower or comparable to pre-pandemic levels. However, India has witnessed an acceleration in e-retail penetration following the pandemic,” the report said rising adoption of online shopping, e-commerce accounts for only 5-6% of overall retail spending in India. In contrast, it is 23–24% of retail spends in the US and over 35% in China large e-commerce companies have been ramping up investments across India's online shopping ecosystem to capitalize on the growing potential. This includes large online marketplaces such as Amazon, Walmart-backed Flipkart as well as Reliance Retail's Ajio instance, earlier this year, Amazon committed an additional $15 billion for the market by 2030, taking up its total investment in India to $26 billion added 120 million online shoppers between 2019 and 2022, while spending per customer on e-retail doubled over the three years, signifying greater engagement as well as spending per shopper. Besides, shoppers who signed up in 2019 have doubled their engagement, frequency of purchases, and spending on digital platforms during the period, according to the report, customers in smaller cities are leading adoption of online shopping, with seven out of 10 buyers from tier-II and III cities. A third of online shoppers in India now belong to the Gen Z-Alpha consumer cohort, the report added. About a third of online shoppers come from low-income or low-middle-income cohorts. Simultaneously, there is a growing base of mature shoppers, it said the coming decade, e-retail growth will be driven by addition of new shoppers and by growing online spending per shopper, according to the analysts by Bain & Co.“As older shoppers get more comfortable, they start experimenting with new categories and new products. So, we see it as a key lever of growth. There is headroom in terms of shopper growth,” Abhishek Raj, leader, Bain India's consumer products, retail, strategy, and digital practices, said the market expands, the seller ecosystem catering to these consumers is also growing with twice as many sellers additions in 2022 compared to 2021, according to the report.“We are seeing diversity in the number of categories customers are buying. We also see an increase in number of transactions on a monthly basis. Typically, entry categories for customers are small electronics, mobile cases or t-shirts. Then you see evolution into various categories, such as fashion, large electronics. We're seeing all of that play out,” Sankalp Mehrotra, vice president of monetization at Flipkart, said.

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