The Indian e-commerce sector is undergoing growth; still there has been a dip in funding from private equity and venture capitalists. This has pressed a drive towards profitability, noticeable by elevated platform and delivery fees and also fewer discounts for customers. This awareness was revealed in a report shown during the opening session of the Phygital Retail Convention.
According to the India Phygital Report 2024, e-commerce presently forms 8-10 per cent of the complete retail market and is estimated to reach 14 per cent by 2026-27. This growth is pumped by a growing active user base, projected to reach 439 million by 2026-27, up from 275-312 million. Still, PE & VC investments in India plummeted by 38 per cent to less than US $ 30 billion in FY 2023 from US $ 47.6 billion in 2022.
The growing comfort of consumers with online shopping has helped the acceptance of quick commerce, with convenience shifting from intermittent to daily purchases. Ravi Kapoor, Partner at PwC India, shared during the conference that even though Indian consumers are vigilant, they are now keen to buy high-value items online without physical scrutiny. He also pointed out that, “In spite of lasting concerns about data privacy, social media plays a decisive role in brand engagement and purchasing decisions. He stressed the importance of human support and privacy in creating trust with consumers, even as AI gains trust for easy tasks”.
Though the India Phygital Report, based on surveys done across 500 stores of 200 brands and the study of 4.4 million e-commerce transactions across 350 brands, has shown that apparel and accessories deemed for 18.8 per cent of e-commerce penetration, while home furnishing stood at 6.1 per cent, and jewelry stayed low at 2.1 per cent.
Diving into India’s dynamic retail landscape, B.S. Nagesh, Founder of TRRAIN, and other panelists emphasised that the difference in shopping behavior between rural and urban India is growing less prominent, with rural consumers showing encouraging signs for retailers. Yet, rural consumers are also value-driven and open to transferring their loyalty from well-known brands to private labels.
The Phygital Retail Convention (PRC) is India’s famous retail intelligence event. It intends to bring together stakeholders from global retail businesses to plan around consumer behaviors, technology, and innovation in the face of disruptive forces.
