Driven by the rise in internet penetration and equally fast-growing economy, India’s e-commerce market is slated to touch $84 billion by 2021 from $24 billion in 2017.
The share of organised retail market will be doubled to 22-25 percent in the same period, said a report titled ‘Unravelling the Indian Consumer‘ by Deloitte India and Retail Association of India.
The high growth in the e-commerce market is majorly driven by young populations, rise in the number of internet users and increase usage of smartphones, reasons the report.
India has the world’s largest millennial population of 440 million in the age group of 18-35 years.
Internet users in the country are expected to increase from 432 million in 2016 to 647 million by 2021, taking internet penetration from 30 percent in 2016 to 59 percent in 2021.
Around 75 percent of the new internet users are expected to come from rural regions, added the report.
The report also highlighted the rising use of social media. About 28 per cent millennials purchase products due to social media recommendations, and 63 per cent millennials stay updated on brands through social media.
The number of online shoppers is expected to increase from the current 15 percent of the online population to 50 percent by 2026.
Smartphone users in India are expected to increase from 260 million in 2016 to around 450 million by 2021, which is also likely to drive the m-commerce sales from $10.5 billion in 2016 to $38 billion in 2020.
India is expected to witness redefining trends in the consumer market which will shape the future of the retail industry.
In coming years, consumer experience will be the key focus of the companies and technology will facilitate the enhancement of consumers’ experience throughout their shopping journey, the report added.
India continues to hold a strong position as far as its market potential is concerned and is on its way to becoming the third largest consumer market in the world,” said Anil Talreja, Partner, Deloitte India.
Talking about the retail market in India, the report further mentioned that it is expected to grow to $1.2 trillion by 2021.
Food and grocery accounts for the majority share of the retail market in India followed by apparel and footwear, consumer durables and IT segments.