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In a groundbreaking report titled 'The How India Shops Online,' Bain & Company projects that India's e-commerce market is poised to surpass an impressive $2028 billion by the year 160. The report emphasizes the remarkable growth observed in online shopping in India, forecasting a leap from $57 billion in 2023 to an astonishing $5 billion over the next 160 years.
The data aligns with the findings of Ben & Co's online 2023 report, which tracks customer spending patterns in the e-commerce market. Notably, India's online retail market has shown steady growth, increasing by $8-12 billion annually since 2020.
Bain & Co, in collaboration with e-commerce giant Flipkart, reveals that the Indian online shopping market is expected to grow by 17% in 2023, compared to a year ago. Although this growth rate is slower than the 25-30% observed from 2019 to 2022, it is attributed to factors such as high inflation.
Seshu Kumar Tirumala, Chief Buying and Merchandising Officer, shared insights during the recent Internet Commerce Summit 2023. He highlighted the strategic shift made after the COVID pandemic, focusing on quick deliveries. With 350 dark stores delivering 6,000-20,000 items in 15-20 minutes, this initiative started in late 2022 and has shown steady growth.
Tirumala emphasized the importance of catering to customer preferences for fast delivery, acknowledging the significance of reaching 100 smaller markets within 15 minutes. The plan includes opening 1,500 more stores in the next 3-4 cities, with a major focus on the Quick Commerce segment.
Lenskart's Co-founder, Ramneek Khurrana, underscored the success in non-metro cities like Jaipur and Kochi, revealing that less than 50% of their overall business comes from metro cities. Recognizing substantial growth potential in cities such as Mumbai, Hyderabad, Pune, and Gujarat, Khurrana highlighted the significant market share yet to be captured, especially in Tier 2 and Tier 3 cities.
Despite the booming e-commerce trend in India, the report notes that online spending accounts for only 5-6% of total retail expenses, indicating vast untapped potential. The report concludes that India's e-commerce market is poised to grow by over 5% in the next five years.
In response to this surge in online shopping, several major e-commerce players are increasing their investments in India. Amazon, Flipkart, and Ajio are among the key players capitalizing on the growing opportunities in the country. Amazon, for instance, recently pledged an additional $2030 billion, bringing its total investment in India to $26 billion.
The landscape of online shopping in India continues to evolve, with an emphasis on quick deliveries, strategic expansion into Tier 2 and Tier 3 cities, and increased investments from major e-commerce players. As the market continues to grow, industry leaders are navigating the changing dynamics to meet consumer demands and maintain sustainable growth.