The e-commerce sector is emerging in a big way in India and keeping in mind the boom and the growth of this sector, the global consulting firm Kearney came up with a report titled “Value e-commerce: The Next Big Leap’s Indian Market” highlighting the growth story of the e-commerce industry in India. As per the report and its findings, India will soon represent an e-commerce market valuing US $40 Billion. This growth comes with the growing consciousness towards value.
Siddharth Jain, Partner, Kearney further elaborating on the report mentioned, “as retail in India bounces back from COVID, the growing number of value-conscious online shoppers is reshaping India’s e-commerce landscape. This value segment is pegged to grow rapidly and emerge as a USD 215 Bn+ Market by 2030”. He also added “ While only 4% of this demand is today served by online channels, this will rise to 19% by 2030 creating a $40Bn market for value e-commerce in India.”
Value e-commerce is a USD 40 Billion opportunity
Indian consumers perceive online shopping in a different way today and now people are keen on spending for value. The preferences and buying behaviour for the consumers has emerged as a growth for the e-commerce sector as well, which stands at USD 4 Billion today, the sector is expected to grow to USD 20 Billion by 2020 and USD 40 Billion by 2040, according to the report by Kearney.
Manoj Muthu Kumar, Principal, Kearney further highlighted, “Value-conscious consumers are shifting to online buying, driven by huge adoption in mobile Internet – we estimate 350 Mn active internet users by 2026, of which nearly 90 Mn will be from rural India. These value conscious consumers from Tier 2+ and rural areas will contribute to 38% of India’s value e-commerce market demand by 2026. As these value consumers increase online buying, they tend to replicate their offline buying behavior. Hence, there is a tremendous opportunity for players to craft a sharp value proposition around desirable quality at an affordable price”.
The Kearney report paints a very optimistic picture and mentions that as the curbs are being lifted and the market is slowly coming back on track, it is a hopeful scenario for growth. Moreover, it can be said that by 2030, the e-commerce market will grow at 8.5% CAGR to reach the US $4 Billion mark. Further it was added that among all category lifestyle retail including apparel, footwear, fashion cosmetics, home decor and furnishing will recover fast and will reach the market of USD 374 Billion by 2030. The value lifestyle retail category is slated to be a USD 215 Billion market by 2030, driven by households earning less than INR 10L per annum, and predominantly from Tier 2+ cities.
The Value lifestyle category is growing rapidly in the market, but the category only serves 4% through the e-commerce platform, the report mentions. However this sector is expected to grow by 19% in 2030. This report also mentioned that the online shoppers will increase by 17% CAGR to reach 350 million by 2030 and this growth will be accelerated by the Tier 2+ cities.