By Press Trust of India | Updated: 27 June 2023.
The country’s online retail market size may touch USD 325 billion (roughly Rs. 26,65,081 crore) by 2030 against USD 70 billion (roughly Rs. 5,74,017 crore) in 2022, mainly due to rapid growth of e-commerce in tier-2 and tier-3 cities, according to a Deloitte India report released on Tuesday.
It also said that online retail penetration is projected to grow at an extraordinary rate, and it would outpace offline retail by 2.5 times in the next decade.
As India ascends to become the world’s third-largest consumer market, Deloitte Touche Tohmatsu India LLP’s (Deloitte India’s) ‘Future of Retail’ report “foresees the online retail sector, which stood at USD 70 billion (roughly Rs. 5,74,017 crore) in 2022, to surge to USD 325 billion (roughly Rs. 26,65,081 crore) by 2030”.
The report attributes these projections to the rapid growth of e-commerce in tier-2 and tier-3 cities, which have surpassed tier-1 markets in terms of total orders.
In 2022, these cities accounted for over 60 percent of all orders, with tier-3 cities experiencing a remarkable 65 percent growth in order volume and tier-2 cities witnessing a substantial 50 percent growth, it said.
“The surge in online retail can be attributed to various factors. The convenience of ordering and returns, bolstered by a robust logistics infrastructure spanning over 19,000 pin codes, has played a pivotal role,” it added.
Additionally, the report said that India boasts a digitally savvy consumer base of 220 million online shoppers, further driving the growth of e-commerce.
Furthermore, the sector has witnessed significant investments from private equity and venture capital firms, totaling USD 23 billion over the past five years, the report said.
Online sales are poised to surpass organised retail, with a growing emphasis on omnichannel retail strategies where retailers seamlessly integrate their offline and online channels to provide consumers with the best of both worlds, it added.
“I am optimistic about the exponential growth potential of India’s retail sector, driven by rising incomes, the expanding middle-class, and rapid digitalisation.
“By harnessing the power of technology, sustainability, and forward-thinking strategies, retailers can create an ecosystem that not only meets evolving consumer demands but also sets new benchmarks for value, engagement, and unforgettable shopping experiences,” Anand Ramanathan, Partner, and Consumer Industry Leader – Consulting, Deloitte India, said.
Further, it suggested that the new commerce channels driven by factors like increased internet use in tier 2 cities, ease of starting online businesses, government support, convenience, personalisation, easy discovery, and payment, and trust in influencers are set to redefine the retail landscape in the country.
“Augmented reality (AR), virtual reality (VR), the Metaverse, and experiential retail are transforming customer interactions. Retailers can enhance customer engagement, satisfaction, and sales by creating captivating and interactive shopping environments,” the report said.
Integrating kiranas into the larger retail ecosystem opens up new markets, expands product range, and strengthens their business presence, it added.
