Online commerce is projected to touch $188 billion by 2025 up from $64 billion in 2020, as covid accelerates adoption of e-commerce, according to a report by industry body FICCI. In the same period, its contribution to the country’s GDP is set to rise too, touching 3.8% of the country’s gross domestic product by 2025.
The Indian retail industry is set to touch $1.1 – $1.3 trillion in value by 2025.
The pandemic has prompted first-time buyers to get online and buy goods and services on the internet. More and more Indian consumers are turning to digital to fulfil their shopping needs. Tier-2 and tier -3 cities are driving the surge in online shopping and consumption of digital content, it said.
“Indian online commerce industry has been on an upward growth trajectory, projected to reach $200 billion in 2026 from $64 billion in 2020. The growth has only been accelerated by the onset of the covid-19 pandemic, as more shoppers, many of them first-time online buyers, turn to online marketplaces to safely fulfil their purchasing needs,” FICCI said in its report.
The past year saw significant gains made by e-retailers across the board as lockdowns restricted consumer mobility. This means people stuck at home bought more groceries, apparel, mobile phones, and other electronics online.
Citing a surge in order volumes during the 2020 festive season i.e. mid-October to November, FICCI’s data suggests that online commerce saw a 56% rise in order volume and 50% growth in gross merchandise value in the year of the pandemic, compared to the 2019 festive season.
In fact, 80% of consumers surveyed in 2020 preferred online or phygital buying in comparison to in-store buying. “Online shoppers in India grew 73% in tier-1 cities and a staggering 400% within Tier 2 and Tier 3 cities, FICCI said in its estimates. 75% respondents indicate a strong trust in online shopping. This includes trust in payment security, followed ease of by return and refund guarantees.
“While traditional brick and mortar remains a critical consumption channel, online commerce has been making serious headway in this space – giving rise to combination or “phygital” buying behaviours, with majority of the growth coming from Tier-2 and -3 segments,” FICCI said in its report. LiveMint