Value e-com market in India to hit $40 billion by 2030: Kearney report

19 Aug '21

3 min read

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India’s value e-commerce market is projected to touch $20 billion by 2026 and $40 billion by 2030, up from $4 billion in 2019, driven by a rapid rise in Internet user base and rise in online shopping, according to a recent report by US-based global management consulting firm Kearney.

The expanding digital footprint in tier III and IV areas as well as in rural India, along with the aspirational needs of these consumers and their changing attitudes towards online buying present a massive opportunity, says the report titled 'Value e-commerce: the next big leap in India's retail market'.

The value lifestyle retail market is expected to grow from $90 billion in 2019 to $156 billion by 2026, and touch $215 billion by 2030, it said. This includes categories like 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 $215 billion-plus market by 2030," Kearney partner Siddharth Jain told a news agency.

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 $40 billion market for value e-commerce in India, he said.

"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," the report said.

Currently, about 70 per cent of lifestyle retail demand comes from the value lifestyle segment. This segment is dominated by unorganised general trade (nearly 80 per cent share) and modern trade is at 16 per cent, while e-commerce has a low penetration at 4 per cent.

By 2030, unorganised general trade is forecast to account for about 57 per cent share, modern trade 24 per cent, and e-commerce at 19 per cent, according to the report

The report pointed out that almost all value lifestyle consumers spend a lot of time finding and evaluating products before they buy them because of their strict budgets.

Also, value lifestyle consumers scout for the best deals, often purchasing products with the biggest discount or markdown, which can be a big factor when they do decide to make a purchase, it said.

Value lifestyle consumers tend to have less brand loyalty and are focused on getting the best quality in their preferred price range. They can be highly influenced by friends, family, and social media, the report added.

Fibre2Fashion News Desk (DS)

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