The e-commerce market is expected to grow 2.5 times faster than the offline retail market, says Deloitte’s report titled “Future of Retail”.
More Indian consumers are turning to online channels for shopping, at the same time the overall offline market will remain the larger market, with a total worth of $1,605 billion in 2030. Whereas in 2022, the size of this market was $860 billion.
The report also mentioned that the size of the overall online market will jump to $325 billion in 2030 from $70 billion in 2022. It will be bigger than the organized retail market, reaching $230 billion in 2030 from $110 billion in 2022.
The report also has witnessed a good growth of e-commerce in tier-2 and 3 cities which is developing the retail landscape. In 2022, the tier-2 and 3 cities accounted for over 60 per cent of the total orders, overtaking tier-1 markets. Tier-3 cities accomplished 65 per cent order volume growth, tier-2 cities experienced a 50 per cent growth, while tier-1 cities saw 10 per cent growth according to the report.
Overall physical retail—including both organized retail and traditional mom-and-pop stores—will nearly double to $1.6 trillion in the same period. Of this, traditional retail will take the lion’s share of $1.3 billion, up from $750 billion in 2022.
The report says – “We expect e-commerce to continue its exponential growth and surpass organized retail in scale and size. Additionally, emerging channels such as social commerce, quick commerce and D2C will reshape how millennials and Gen Z will shop in the future. Investment in specialized vertical e-commerce is also expected to grow in the near future,” Sources reported.
Social commerce is expected to be the biggest contributor accounting for $55 billion worth of value out of $325 billion in the online channel. It will be compiled by quick commerce at $40 billion and direct-to-customer (D2C) at $20 billion. On the other hand in the offline market, traditional channels will account for $1,375 billion out of $1,605 billion, which will be adhered by organised retail channels at $230 billion.
The rise in internet users has a direct impact on the e-commerce sector in India. However,the private companies and the Centre are increasing their interest in the e-commerce channel of India.
A week ago in the United States, Andy Jassy, the chief executive officer (CEO) of Amazon met PM Narendra Modi and announced that the company will invest in India to $26 billion by 2030.
We know that the government’s Department for Promotion of Industry and Internal Trade (DPIIT) founded Open Network for Digital Commerce (ONDC) last year to build open e-commerce in India.
At present, India is one of the world’s top five retail markets and lagging behind China and the US only. India is likely to be the third-biggest by 2030.
Moreover, categories such as apparel & footwear and gems & jewellery also seem to grow at a fast clip, though on a small base. Whereas food and grocery retail which is currently 65% of the total retail market, is predicted to double by 2030.
Hence, as per the report from Deloitte it is expected that e-commerce may beat modern retail by 2030.
