Online retail is projected to grow at a much faster rate than offline retail in India until 2030, according to a report by Deloitte titled Future of Retail. The report highlights the increasing preference of Indian consumers for online shopping and predicts that the e-commerce market will grow 2.5 times faster than the offline retail market.
In 2030, the overall offline retail market is expected to reach a total value of US $ 1,605 billion, making it the larger market. In comparison, the online market is predicted to expand to US $ 325 billion, surpassing the organised retail market, which is forecasted to reach US $ 230 billion by 2030.
The report attributes the significant growth of the online market over the past five years to several factors, including the ease of ordering and returns, a robust logistics infrastructure covering a wide range of locations, a digitally savvy consumer base of 220 million online shoppers, and substantial investments from private equity and venture capital firms totalling US $ 23 billion.
The retail landscape in India is being reshaped by the rapid expansion of e-commerce in Tier-2 and Tier-3 cities. These cities accounted for over 60 per cent of total orders in 2022, outpacing Tier-1 markets. Tier-3 cities experienced the highest order volume growth at 65 per cent, followed by Tier-2 cities at 50 per cent, while Tier-1 cities saw a growth rate of 10 per cent.
Within the online channel, social commerce is expected to contribute the most, accounting for US $ 55 billion of the US $ 325 billion market. It will be followed by quick commerce at US $ 40 billion and direct-to-customer (D2C) at US $ 20 billion. In the offline market, traditional channels will dominate, representing US $ 1,375 billion out of the total US $ 1,605 billion, with organised retail channels contributing US $ 230 billion.
The e-commerce sector in India has attracted significant interest from both private companies and the government. Amazon’s CEO, Andy Jassy, recently announced plans to invest US $ 26 billion in India by 2030 during a meeting with Prime Minister Narendra Modi. Additionally, the Department for Promotion of Industry and Internal Trade (DPIIT) established the Open Network for Digital Commerce (ONDC) last year to foster open e-commerce development in the country.
