Indian Economy News

E-commerce market to hit US$ 325 billion by 2030, rural India to lead growth

  • IBEF
  • April 30, 2024

A report by Invest India suggests that India's e-commerce landscape is on the brink of monumental growth, projected to reach US$ 325 billion by 2030, with the nation's digital economy soaring to US$ 800 billion. With online shopping currently constituting around 7% of India's retail market, the potential for expansion is vast, driven by factors such as high internet penetration, affordable internet services, and a surge in rural smartphone users. India's internet user base, the second largest globally at 881 million, positions it to become the third-largest online retail market by 2030, with an estimated 500 million shoppers. The affordability of internet access, priced at around US$ 0.17 per gigabyte, is a significant driver, coupled with the proliferation of smartphones, with over 80% of the population expected to have access by 2026. Additionally, the dominance of the Unified Payments Interface (UPI) in digital transactions and the availability of content in local languages contribute to the sector's growth potential.

Furthermore, the report highlights the rising importance of rural-centric e-commerce, with tier two-four towns and rural areas expected to drive significant demand by 2026. Government initiatives like the National Logistics Policy aim to enhance logistical efficiency, while platforms such as the Government e-marketplace (GeM) have seen substantial growth, reaching a Gross Merchandise Value of US$ 2011 billion in 2022. Quick commerce, particularly in hyperlocal mobility, is forecasted to grow exponentially, with companies like Swiggy and Zomato leading the market. Mergers and acquisitions within the e-commerce sector, alongside government schemes like Jan Dhan Yojana and the implementation of the Goods & Service Tax (GST), are instrumental in shaping India's digital economy and fostering its promising future in online retail.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.