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Online share in India’s retailing jumps to 6.5% while organized players account 18.5% of India’s annual retail market

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A robust growth of online businesses has propelled the share of India’s organized retail to 18.5% of the total $836 billion annual retail market in 2022, according to a latest report.

While modern brick-and-mortar retailers accounted for about 12% of the total annual market, online retailers have captured about 6.5% of the yearly business, India Retail and E-commerce Trends report by Wazir Advisors and Unicommerce said.

The overall share of modern retailers was about 9% a few years ago.

The report said the pandemic served a severe blow to India’s physical retailing business in fiscal year 2021 that led the brick-and-mortar retailing in the country to shrink by 8.5% that year. However, the e-tailing business has grown over the years and will continue to do so, the report said.

“Despite the pandemic-related lockdown’s adverse impact on overall retail in FY 2021, online retail market in India is expected to grow at 32% over the next few years with potential to reach $225 Billion,” the report said.

The report highlights that direct-to-consumer brands (D2C) has played a crucial role in in the online growth over the years.

“The D2C segment emerges as the key propeller of this growth; reflecting a robust CAGR of near 45% levels. Marketplaces garner significant 35% of the D2C potential categories and hence they will further leverage this growth by focusing this segment,” the report said.