Value e-commerce in India to touch US$ 40 bn by 2030: Report

According to a research by Kearney, the value e-commerce industry in India is anticipated to reach US$ 40 billion by 2030, up from US$ 4 billion in 2019. This is due to a significant growth in internet users and as more people adopt online buying. According to the report titled "Value e-commerce: the next big leap in India's retail market," the expanding digital footprint in tier III and IV areas, as well as rural India, along with the aspirational needs of these consumers and their changing attitudes toward online buying, present a massive opportunity.

The value e-commerce industry — currently valued at US$ 4 billion — is anticipated to develop rapidly, reaching US$ 20 billion by 2026 and US$ 40 billion by 2030.

In the meanwhile, the value lifestyle retail industry is anticipated to increase from US$ 90 billion in 2019 to US$ 156 billion by 2026, reaching US$ 215 billion by 2030, according to the report.

Apparel, footwear, fashion accessories, cosmetics, minor appliances, and home & lifestyle are all included.

"The rising number of value-conscious online customers is changing India's e-commerce market as retail in India recovers from COVID. By 2030, this value sector is expected to develop significantly, reaching a market size of US$ 215 billion or more" Mr. Siddharth Jain, a partner at Kearney, explained.

He went on to say that while online channels now service just 4% of this demand, this would increase to 19% by 2030, generating a US$ 40 billion market for value e-commerce in India.

"By 2026, we estimate the number of internet users in India to exceed 1,100 million, with a third of these being active online shoppers. We think that various business models and internet platforms will increasingly meet the demands of value lifestyle customers" It was also mentioned.

Currently, the value lifestyle sector accounts for around 70% of all lifestyle retail demand. Unorganized general trade (~80% market share), contemporary trade (16%), and e-commerce (4% market share) dominate this category.

Unorganized general trade is expected to account for roughly 57% of total trade by 2030, with contemporary trade accounting for 24% and e-commerce accounting for 19%.

Because of their tight budgets, virtually all value lifestyle customers spend a lot of time discovering and analysing items before purchasing them, according to the survey.

Furthermore, value lifestyle shoppers look for the greatest discounts, frequently choosing items with the largest discount or markdown, which can be a major influence in their decision to buy, according to the report.

According to the research, value lifestyle customers are less loyal to brands and are more concerned with receiving the greatest quality in their desired price range. Friends, family, and social media may have a big impact on them.

The research included an overview of different e-commerce businesses in India, such as Snapdeal and Lenskart, who are attempting to align themselves with the demands of the value-conscious market.

The report's case study on Snapdeal focused on how the firm has redefined its e-commerce strategy by focusing solely on value lifestyle e-commerce.

Modern format value retailers like V-Mart are working to extend their e-commerce platforms, according to the research.

"India-2 (primarily middle to low income in tier II towns) is expected to push the value e-commerce industry to US$ 215 billion, with their online buying behaviour likely to enhance the value e-commerce market...

"Online firms who build a clear value offer around relevance, convenience, and trust, focusing on India-2's requirements, will emerge as strong rivals to grab this US$ 40 billion market," said Mr. Karan Dhall, a partner at Kearney.

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