The e-commerce sector in India is expected to develop at a 15 per cent compound annual growth rate (CAGR) to reach US $ 550 billion by 2035, according to a joint analysis by ANAROCK and ETRetail. According to the report, the industry’s explosive growth is being propelled by the adoption of digital technology and changing consumer habits. In the meantime, mall vacancy rates have drastically decreased, reaching 8.1 per cent in 2024, indicating a greater need for physical retail establishments.
The e-commerce sector in India was estimated to be worth US $ 125 billion in 2024. Over the following ten years, it is anticipated to increase at a compound annual growth rate (CAGR) of 15 per cent, reaching US $ 345 billion by 2030.
Increased internet usage, the widespread use of smartphones, improved digital payment infrastructure, and Government programs like “Digital India” are all driving this expansion.
The growing involvement of customers from smaller cities is one of the main factors propelling this progress. In Tier-2 and 3 cities, the percentage of online consumers increased from 46 per cent in the fiscal year 2019–20 (FY ’20) to 56 per cent in FY ’24 and is expected to reach 64 per cent by FY ’30, says Anuj Kejriwal, CEO & MD – ANAROCK Retail.
E-commerce companies are taking advantage of this demand by providing improved delivery and logistics networks in these areas.
India’s physical retail industry is changing significantly, even as internet purchasing continues to grow. According to the analysis, absorption was a significantly higher six million square feet in 2024, while new mall supply in the top seven cities in the nation was only one million square feet.
As a result, mall vacancy rates have drastically decreased from 15.4 per cent in 2019 to 8.1 per cent in 2024, indicating a high demand for retail space.
The report also emphasises how both domestic and foreign retailers are rapidly growing into Tier-2 and 3 cities, where it is anticipated that more than 26 million square feet of mall space would be built by 2030.
This change is in line with the changing retail landscape in India, where organised retail is expected to grow from its current 12 per cent to 17 per cent by 2035. To serve its varied and growing customer base, India’s retail industry is anticipated to see the mixing of digital commerce with in-store experiences as both e-commerce and brick-and-mortar retail develop.
