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With the rapid increase in internet user base and more people embracing online shopping, the value e-commerce market in India is expected to touch $40 billion by 2030, up from $4 billion in 2019, according to a report by Kearney. The report titled, ‘Value e-commerce: the next big leap in India’s retail market’, attribute India’s growing value e-commerce market to widening digital footprint in tier III and IV areas as well as in rural India. It also added that the rise in aspirational needs of these consumers and their changing attitudes towards online buying present a massive opportunity.
The value e-commerce market is currently estimated at $4 billion. It is expected to see rapid growth and reach $20 billion by 2026, and $40 billion by 2030.
The value lifestyle retail market is also expected to grow from $90 billion in 2019, to $156 billion by 2026, and touch $215 billion by 2030. The segment includes apparel, footwear, fashion accessories, cosmetics, small appliances, and home and living.
“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 billion-plus market by 2030,” Kearney partner Siddharth Jain said.
He added that while only 4 per cent of this demand is today served by online channels, this will rise to 19 per cent by 2030 creating a USD 40 billion market for value e-commerce in India.
“We expect the number of internet users in India to surpass 1,100 million people by 2026 – and a third of these will be active online buyers. We believe that the needs of value lifestyle consumers will increasingly be met by differentiated business models and online channels,” it added.
The value lifestyle segment attracts about 70% of lifestyle retail demand. This segment is dominated by unorganised general trade (nearly 80% share) and modern trade is at 16%, while e-commerce has a low penetration at 4%. The unorganised general trade will account for about 57% share, modern trade 24%, and e-commerce at 19% by 2030.
“Value lifestyle retail is pegged to grow to $215 billion markets, driven by India-2 (mainly mid to low income in tier II towns) – their online purchase behaviour is set to increase the value e-commerce market. Online players that craft a sharp value proposition around relevance, convenience, and trust, focused on needs of India-2 will emerge strong contenders to capture this $40 billion market,” Kearney Partner Karan Dhall said.