Rural India Emerged As A Goldmine For Ecommerce Platforms In Festive Season: RBI

The Reserve Bank of India (RBI) has said that rural India emerged as a “goldmine” for ecommerce platforms in the recently concluded festive season. 

In its monthly bulletin for November 2024, the central bank said that the country’s rural belt is expected to further drive ecommerce sales on the back of a “sharp increase in kharif output and optimism around rabi production”.

“Rural India is emerging as a gold mine for ecommerce companies in this festival season; this is expected to gather further momentum with the sharp increase in kharif output and optimism around rabi production emboldening a record foodgrains target for 2024-25 (FY25),” the bulletin said. 

Noting that festival spending lit up “real activity in the third quarter”, the report also underscored that the ecommerce space is “burgeoning” with a variety of marketing strategies and brand recall initiatives to catch the attention of the GenZ. 

The monthly bulletin also touched upon the rapidly growing quick commerce sector. “D2C brands are scrambling for funds to expand their presence and increase sales through quick commerce platforms – an ecosystem valued at over $5 Bn and projected to reach $30 Bn by 2029-30,” it said. 

The central bank also said that “electric two-wheelers sparkled” in 2024’s festive season, adding that a “distinct premiumisation” gained further ground in the entire electric vehicle (EV) segment during the period. 

The RBI’s observations are in line with the data of the ecommerce platforms. As per Flipkart, it clocked a record 282 Mn unique visitors between September 1 and October 28, primarily driven by Tier-II+ cities. 

For Amazon too, non-metro cities played a significant role during the festive season sale, with over 85% of customers and nearly 70% of Prime members hailing from Tier-II & III cities.

The surge has primarily been driven by the growing penetration of affordable smartphones and cheap internet tariffs. Besides, factors such as growing disposable income, variety of offerings, convenience and discounts during the festive season have also contributed to the growing adoption of ecommerce platforms in cities beyond metros. 

As a result, the homegrown startup ecosystem has spawned the rise of multiple ecommerce and D2C unicorns, including boAt, Flipkart, Honasa, among others, that have disrupted the status quo. Buoyed by this, India’s ecommerce startups raised more than $561 Mn in funding between January and June 2024. 

As per an Inc42 report, India’s ecommerce segment is projected to become a $400 Bn market opportunity by 2030.