Ecommerce will be the engine of the next level of Indian consumer growth in 2019, stated a Deloitte India and Retailers Association of India (RAI) report. The report has valued India’s ecommerce marketplace at $200 Bn and predicted its growth to $1.2 Tn by 2021.
Interestingly, according to a 2018 IBEF (India Brand Equity Foundation) report, the ecommerce market was estimated to reach $200 Bn by 2026 from $38.5 Bn in 2017. However, the ecommerce market has reached the value of $200 Bn in 2019 itself.
The Deloitte and RAI report titled ‘Unravelling the Indian consumer’ has cited increased internet penetration and foray of more international retailers to India as the main reasons for the expected growth. As a result of which, the share of organized retail market is also expected to increase from around 12% in 2017 to 22-25% by 2021.
Other factors attributed to this growth projection included, change in buying frequency of Indian consumers, reach of ecommerce across Tier 1, Tier 2, and Tier 3 markets. Another prominent reason was the rise of social-commerce in India. Social-commerce includes the sales redirected through social media channels.
According to the report, 28% millennials purchase products due to social media recommendations, and 63% millennials stay updated on brands through social media.
Currently, the India’s ecommerce marketplace is reported to be growing at CAGR 32% and is expected to further rise as the ecommerce space grows, boosting the overall consumer segment growth in India.
Speaking at the report launch, a Deloitte India spokesperson said, “This growth rate reflect the maturity of business and the solid platform existing in the country for all types of market players such as consumers, distributors, logistics service providers and development of the ancillary sectors including transportation, logistics, cold chain facilities, etc., that will help India consumer business to the next level of growth.”
The report also highlighted interesting insights in terms of sub-sector performance within consumer retail. While the F&B (food and beverage) and apparel, footwear and accessories space contributed a bigger share to the consumer retail pie, FMCG (fast-moving consumer goods) and automotive companies had much higher numbers for total market.