India’s e-commerce landscape is on the brink of a monumental transformation, with projections indicating a staggering surge to over USD 300 billion by 2030, fueled by the country’s burgeoning digital economy poised to hit the USD 1 trillion mark in the same timeframe.
Invest India’s forecast paints a compelling picture, positioning India as the second-largest online shopper base globally by 2030, with an anticipated 500-600 million active shoppers. Presently, India already boasts the second-largest Internet user base worldwide, comprising 881 million users, underscoring the nation’s exponential growth trajectory in the digital realm.
While the current valuation of India’s e-commerce sector stands at USD 70 billion, constituting approximately 7% of the total retail market, the sector’s future outlook appears exceptionally promising, propelled by various factors.
The digital landscape in India has witnessed a remarkable expansion in internet penetration, with over 60% of the population (918 million) accessing the internet by September 2023. Forecasts indicate that by 2025, an estimated 87% of Indian households will have internet connectivity. The proliferation of smartphones is also contributing significantly, with projections suggesting that by 2026, over 1.18 billion individuals across the nation will own smartphones, representing over 80% of the population.
Key to this surge is the affordability of data prices, with one gigabyte priced at approximately USD 0.17 (Rs 13.5), incentivizing widespread internet adoption. Mobile data traffic has tripled since 2018, underscoring the increasing reliance on digital platforms for a myriad of needs. The Unified Payments Interface (UPI) has emerged as a pivotal player in digital payments, facilitating transactions worth USD 1.5 trillion in 2022 alone.
Moreover, the proliferation of local language and mobile-first content has democratized digital access, with approximately 73% of India’s internet users engaging with content in Indian languages. This burgeoning regional language user base, estimated at 540 million, represents a lucrative market valued at USD 53 billion.
Investments in digital infrastructure, such as UPI, eKYC, and Aadhaar, have streamlined consumer onboarding processes, reducing time by 80% and enhancing the overall digital experience. The Government of India’s initiative, the Open Network for Digital Commerce (ONDC), launched in 2022, aims to empower MSMEs and democratize e-commerce, further catalyzing India’s digital transformation journey.
