ONDC to help digital commerce grow fivefold by 2030: McKinsey & Company

Digital commerce in India is projected to surge to Rs. 27,38,240 - 29,09,380 crore (US$ 320-340 billion) by 2030, marking a fivefold increase from Rs. 5,13,420 - 5,98,990 crore (US$ 60-70 billion) in 2022. The Open Network for Digital Commerce (ONDC) largely drives this growth, a government-backed platform launched in 2022 that connects buyers and sellers online. According to a McKinsey & Company study, fashion and lifestyle commerce is set to rise from Rs. 94,127 - 1,11,241 crore (US$ 11-13 billion) in 2022 to Rs. 6,84,560 - 7,01,674 crore (US$ 80-82 billion) in 2030. Electronics and durables are expected to grow threefold from Rs. 2,05,368 -2,22,482 crore (US$ 24-26 billion) in 2022 to Rs. 5,98,990-6,16,104 crore (US$ 70-72 billion) in 2030. The grocery sector will see an 11-fold increase from Rs. 34,228 - 42,785 crore (US$ 4-5 billion) in 2022 to Rs. 4,27,850 – 4,70,635 crore (US$ 50-55 billion) in 2030. These categories will account for 62% of total digital commerce in 2030. Services, food, and beverages are projected to grow five to six times, reaching Rs. 2,56,710 – 2,73,824 crore (US$ 30-32 billion) by 2030. The entertainment segment, including gaming and over-the-top services, is expected to grow six times to Rs. 1,45,469 – 1,62,583 crore (US$ 17-19 billion). Hospitality and pharmaceuticals are also set for substantial growth.

A vibrant digital economy fuels growth. The number of smartphones in India crossed one billion in 2024, and internet users are projected to surpass 900 million in 2025. With a population of 1.4 billion, India has become the world's most populous nation. Average spending power has risen from Rs. 23,188 (US$ 271) in 2012 to Rs. 60,324 (US$ 705) in 2023. However, challenges persist. Despite increased spending power, 95% of consumers have less than Rs. 1,71,132 (US$ 2,000) in financial assets, limiting their purchasing power for expensive products. Companies also face long payback periods due to the time required to build operations and overcome challenges.

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