Starting from a base of $30 billion in 2020, India’s online commerce sector is expected to get to $300 billion
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BENGALURU — Starting from a base of $30 billion in 2020, India’s online commerce sector is expected to get to $300 billion by the end of the decade in 2030, contributing to a $1 trillion digital opportunity in the country, according to a report released on Thursday.
This demonstrates it is no longer a niche phenomenon catering to a small segment but has firmly established itself as a dominant force within the Indian retail landscape for a significant and growing share of the population, said Bessemer Venture Partners in its report.
“India presents a $1 trillion dollar digital opportunity. The emergence of multiple consumer marketplaces, platforms and new-age brands in the past decade are a testament to the growing aspirations of an emergent India. This makes us exceptionally optimistic about the potential for many more consumer plays to emerge in the coming years,” explained Anant Vidur Puri, Partner.
A tailwind trifecta of internet penetration, evolving demographics, and policy changes are among the trends that have enabled the rise of new age consumer companies.
Going forward, it is the evolution of commerce marketplaces, content platforms and changing consumer aspirations that will power newer companies to win in the Indian context, the report noted.
India's burgeoning online commerce sector has witnessed an extraordinary expansion in recent years.
In addition, the recent rise of quick commerce (q-commerce) has introduced a new dimension to the online retail ecosystem, further revolutionising the way consumers access goods.
Platforms such as BigBasket, Blinkit, Swiggy, and Zepto have spearheaded this movement, demonstrating the viability and consumer appeal of rapid delivery services. This segment is seeing the further trend of verticalised q-commerce emerging, with startups like Snabbit, Swish and Slikk catering to niche needs.
Lastly, D2C brands are increasingly catering to an aspirational mass-premium audience - an audience characterized by the demand for newer, better priced, higher quality products.
“India is experiencing a content revolution driven by consumers' diverse appetites for entertainment, education, and gaming. Characterised by short attention spans and a multitude of accessible platforms across interests, languages, and budgets, user engagement is rapid, facilitated by frictionless microtransactions or autopay-led subscriptions,” the report mentioned.
Platforms are adapting to these shorter attention spans with quick and engaging content. Over the past five years, short-form video platforms in India have witnessed a 3.6X growth in daily active users, competing with mainstream digital platforms.
Moreover, the rise of virtual tipping, UPI autopay and other micro-transactions is expected to reach $1.5 billion by 2029 and exemplifies the growth of UPI-enabled microtransactions which allows companies to experiment with diverse monetisation models beyond just ads.
There is increased spending on organic food, protein, fitness gadgets, preventive healthcare, and wellness services.
Health-focused food and beverage (F&B) as a category has expanded from 11 per cent to 16 per cent of F&B spend and is expected to continue to increase as brands have been quick to adapt to this trend, said the report.