India’s e-commerce market is expected to grow from $120-140 billion currently to $280-300 billion by 2030. According to a report by Boston Consulting Group (BCG), shoppers today move easily between screens and stores, researching online, buying offline, and vice versa, based on convenience, trust, and need. The report states that e-commerce is growing, yet it accounts for only 7-8 percent of total consumer spending. Offline retail continued to grow at the rate of 13-14 percent annually. Currently, 5 out of 10 offline buyers use online platforms to research and gather information before making a purchase.
What is the BCG report saying?
Parul Bajaj, India leader of marketing, sales and pricing practice at BCG, said that the retail structure in India is becoming multi-channel. Brands that consider online and offline as separate strategies are in danger of being left behind. Those who are integrating the two are growing faster, innovating more, and delivering better financial results. The competitive advantage now lies in orchestrating connected consumer journeys across different formats. Growth is being driven rapidly by e-services, which is expected to grow at a CAGR of 20-22 percent, which is higher than the estimated 16-18 percent growth for e-retail. Big changes are visible in specific categories, now 45 percent mobiles and 23 percent personal electronic devices are purchased online.
440 shoppers expected by 2030
Additionally, about 30 percent of travel and hotel bookings and 44 percent of movie and event tickets are booked digitally, and these segments are growing above 40 percent. The shopper base is also increasing and diversifying. The report states that there are currently about 300 million online shoppers in India, and this figure is expected to reach 440 million by 2030. About 30 percent of these users are now from rural India. About 45 percent of digital shoppers are women, many of whom consider safety and freedom as the main reasons.
Platforms have to do this now
Kanika Sanghi, partner and director at BCG, said that Indian shoppers are becoming more diverse, consumers are using different formats according to their needs and maturity. As the demographic mix of online shoppers becomes more democratic, platforms and brands will need to design simpler, safer and more accessible experiences across touchpoints. Now is the opportunity to reduce friction, build trust, and simplify the multi-format journey for every shopper.
Quick commerce speed up
The report highlights the shift towards category-focused platforms, which now account for more than 60 percent of online spending. Emerging formats like quick commerce and social commerce are gaining momentum, especially in tier II and tier III cities. Quick commerce has seen a CAGR of more than 100 percent, while social and chat commerce are growing at the rate of 40-45 percent. E-commerce has also accelerated business scaling. The time taken for a brand to reach Rs 100 crore annual revenue has reduced from 11 years to about 7 years. Small businesses and MSMEs are citing benefits.
Small sellers are also helping
BCG reported that nearly 90 percent of small online sellers have reported sales growth, many of which are increasing employment and reaching national markets at lower costs. The report says that together these enablers can help create a more inclusive, robust and trusted e-commerce ecosystem that increases participation, accelerates business growth and supports India’s changing consumption landscape in the long run.