India’s fast-expanding e-commerce market is set to be worth $84 billion within the next three years, as retail as a whole grows to be worth $1.2 trillion, making it Asia’s third-largest market, a new study forecasts.
The report from Deloitte India and the Retail Association of India, Unravelling the Indian Consumer, said businesses will be powered by strong macro-economic factors – India is one of the fastest-growing major economies globally – plus “robust demographics”.
Total retail value will increase by 50% between 2017 and 2021, with e-commerce growing seven times faster as online shopping is fuelled by smartphone usage and internet penetration across semi-urban and rural parts of the country.
Greater provision of the internet is not only growing online retail but also m-commerce, which is expanding “at an exponential rate”, the report said – m-wallet transactions were up from Rs 200 billion in FY2016 to Rs 3,000 billion in FY2018, it noted.
Other factors driving e-commerce include greater use of smartphones for shopping and the strong rise in the millennial population; there’s also a growing trend in social commerce, with 28% of millennials buying products after social media recommendations, and 63% of millennials saying they keep up-to-date with news about brands via social media.
It seems, though, that the Indian consumer wants what consumers tend to want everywhere.
They prefer to buy from modern retail stores with spacious layouts and, while there is an ever-increasing number of channels for buying a product, the shopping experience is becoming the key differentiator, according to the report.
Indian consumers are also becoming increasingly health conscious, exercising more and making healthier food choices. Research shows 36% of Indian millennials have a fitness app on their phones and 45% believe leading a healthy life is essential.
Convenience, too, is a big factor for millennials making shopping choices. A lack of time is one of the main reasons cited by younger people for online shopping and online ordering from restaurants. It’s for this reason, too, that the “ready-to-eat” food category has grown at over 28% a year over the last five years in India.―WARC