Msmes To Drive Half Of India's E-Commerce Growth By 2030: Mckinsey Report

(MENAFN- KNN India) New Delhi, Mar 17 (KNN) India's e-commerce sector is expected to expand significantly over the next decade, with its share in overall retail projected to rise from about 6 per cent to as much as 11 per cent by 2030, according to a report by McKinsey & Company.

The report indicates that micro, small and medium enterprises (MSMEs) will account for nearly half of this growth, underscoring their central role in the country's evolving retail landscape, ANI reported.

MSMEs Remain Core to Retail Ecosystem

MSMEs operate across a wide range of sub-segments differentiated by category, geography, scale and levels of formality, reflecting the deeply fragmented nature of India's retail landscape.

According to the report, this fragmentation is structural and likely to persist, creating a distinctive environment in which small sellers and local traders coexist alongside large national and international retailers.

“We therefore believe this large, fragmented, and growing group of sellers will seek services and digital solutions that are fit-for-purpose: unbundled, flexible, lower cost and more 'consumer direct' relative to offerings provided by today's dominant marketplaces,” the report noted.

Shift Towards Flexible Digital Solutions

The report notes that MSMEs are increasingly seeking cost-effective and flexible digital tools tailored to their needs. These include solutions that allow direct engagement with consumers rather than relying solely on large marketplace platforms.

Government-led initiatives such as the Open Network for Digital Commerce (ONDC) are also helping lower entry barriers and expand market access for smaller businesses.

Multiple Online Channels Gain Traction

Indian MSMEs are leveraging three primary online channels, including large e-commerce marketplaces that provide scale and visibility, quick commerce platforms that prioritise speed and convenience, and direct-to-consumer (D2C) channels spanning websites, apps and social media.

The report highlights that D2C adoption is expanding at nearly three times the pace of traditional marketplace-based e-commerce.

Currently valued at USD 10–12 billion, the D2C segment could grow to USD 60 billion by 2030. A survey of over 1,000 MSMEs found a near-even split in channel preference, with 53 per cent favouring D2C and 47 per cent relying on marketplaces.

Marketplaces to Retain Relevance

Despite the rise of D2C, large e-commerce platforms are expected to remain integral to the ecosystem. Their scale, discovery capabilities and logistics networks are likely to support a substantial share of demand, with projected sales of up to USD 100 billion by 2030.

(KNN Bureau)

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