“India’s Online Retail Industry Estimated to Expand to $325 Billion by 2030, According to Deloitte India Study”
India’s online retail sector is poised for significant growth, with projections suggesting that it could reach a staggering $325 billion by 2030, as stated in a recent report by Deloitte India. This would mark a substantial increase from the $70 billion recorded in 2022. The report highlights the rapid expansion of e-commerce in tier-2 and tier-3 cities as the primary driver behind this surge in online retail penetration.
The study predicts that online retail will outpace offline retail by 2.5 times over the next decade, showcasing the remarkable rate at which online shopping is gaining popularity. As India solidifies its position as the world’s third-largest consumer market, Deloitte India’s ‘Future of Retail’ report underscores the immense potential for growth in the online retail sector.
The report attributes the projected growth to the impressive performance of e-commerce in tier-2 and tier-3 cities, surpassing tier-1 markets in terms of total orders. In 2022, these cities accounted for over 60% of all orders, with tier-3 cities experiencing a remarkable 65% growth in order volume and tier-2 cities witnessing a substantial 50% growth.
The convenience of ordering and returns, supported by a robust logistics infrastructure spanning over 19,000 pin codes, has played a pivotal role in driving the surge in online retail. Furthermore, India’s digitally savvy consumer base of 220 million online shoppers is contributing significantly to the growth of e-commerce. The sector has also attracted substantial investments from private equity and venture capital firms, totaling $23 billion in the past five years.
The report also highlights the increasing emphasis on omnichannel retail strategies, where retailers seamlessly integrate their offline and online channels to provide consumers with a holistic shopping experience. This integration is expected to propel online sales beyond organized retail.
Anand Ramanathan, Partner and Consumer Industry Leader – Consulting at Deloitte India, expressed optimism about the exponential growth potential of India’s retail sector, driven by rising incomes, an expanding middle class, and rapid digitalization. He emphasized the importance of retailers leveraging technology, sustainability, and forward-thinking strategies to meet evolving consumer demands and deliver exceptional shopping experiences.
The report further predicts that new commerce channels, fueled by increased internet usage in tier-2 cities, ease of starting online businesses, government support, convenience, personalization, easy discovery and payment options, and trust in influencers, will redefine the retail landscape in India. Technologies such as augmented reality (AR), virtual reality (VR), the Metaverse, and experiential retail are transforming customer interactions, presenting opportunities for retailers to enhance engagement, satisfaction, and sales by creating captivating and interactive shopping environments.
Additionally, the report suggests that integrating local kiranas (mom-and-pop stores) into the larger retail ecosystem will unlock new markets, expand product ranges, and strengthen their business presence.
In conclusion, the Deloitte India report underscores the immense growth potential of India’s online retail sector, projecting it to reach $325 billion by 2030. With the rapid growth of e-commerce in tier-2 and tier-3 cities, a digitally savvy consumer base, and significant investments in the sector, online retail is set to outpace offline retail in the coming years. Retailers are urged to embrace technology, sustainability, and omnichannel strategies to meet evolving consumer demands and create exceptional shopping experiences in the evolving retail landscape of India.
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