According to a recent report by Deloitte India, the size of India’s online retail market is projected to reach USD 325 billion (roughly Rs. 26,65,081 crore) by 2030, compared to USD 70 billion (roughly Rs. 5,74,017 crore) in 2022. The rapid growth of e-commerce in tier-2 and tier-3 cities is primarily responsible for this exponential growth. The report also highlights that online retail penetration is expected to outpace offline retail by 2.5 times over the next decade.
Deloitte India’s ‘Future of Retail’ report predicts that as India becomes the world’s third-largest consumer market, the online retail sector will surge to USD 325 billion (roughly Rs. 26,65,081 crore) by 2030. This growth is attributed to the dominance of e-commerce in tier-2 and tier-3 cities, which have exceeded tier-1 markets in terms of total orders.
The report reveals that these cities accounted for over 60 percent of all orders in 2022. Tier-3 cities experienced a remarkable 65 percent growth in order volume, while tier-2 cities witnessed a substantial 50 percent growth. The convenience of ordering and returns, along with a robust logistics infrastructure covering 19,000 pin codes, has played a crucial role in the surge of online retail.
Furthermore, India has a digitally savvy consumer base of 220 million online shoppers, which further contributes to the growth of e-commerce. The sector has also attracted significant investments from private equity and venture capital firms, amounting to USD 23 billion over the past five years.
The report predicts that online sales will surpass organized retail, with a focus on omnichannel retail strategies. Retailers are striving to seamlessly integrate their offline and online channels to provide consumers with the best of both worlds.
Speaking about the potential of India’s retail sector, Anand Ramanathan, Partner and Consumer Industry Leader – Consulting at Deloitte India, said, “I am optimistic about the exponential growth potential of India’s retail sector, driven by rising incomes, the expanding middle-class, and rapid digitalization. By harnessing the power of technology, sustainability, and forward-thinking strategies, retailers can create an ecosystem that not only meets evolving consumer demands but also sets new benchmarks for value, engagement, and unforgettable shopping experiences.”
The report also highlights emerging trends that are set to redefine the retail landscape in India. Factors such as increased internet use in tier-2 cities, ease of starting online businesses, government support, convenience, personalization, easy discovery and payment, and trust in influencers will drive the growth of new commerce channels. Additionally, augmented reality (AR), virtual reality (VR), the Metaverse, and experiential retail are transforming customer interactions, enhancing engagement, satisfaction, and sales.
The integration of kiranas (small local stores) into the larger retail ecosystem is seen as an opportunity to open up new markets, expand product range, and strengthen business presence.
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Deepak Sen is a tech enthusiast who covers the latest technological innovations, from AI to consumer gadgets. His articles provide readers with a glimpse into the ever-evolving world of technology.