- India on track to become world’s third-largest consumer market by 2030, characterised by heightened competition from direct-to-consumer (D2C) brands and a focused drive toward premiumisation.
The Indian e-commerce market is poised for remarkable growth, projected to reach $325 billion by 2030, driven significantly by robust rural demand.
According to a recent report by FICCI and Deloitte, this burgeoning market is expected to expand at a compound annual growth rate (CAGR) of 21 per cent.
This surge parallels the retail sector′s anticipated growth, valued at $753 billion in FY23, with a CAGR of 9.1 per cent until FY27, the highest among major economies.
Key factors contributing to this growth include the rapid adaptation of retailers to omni-channel strategies, the implementation of technology-enabled experiential selling, and the introduction of new private labels designed to meet the aspirations of price-sensitive Indian consumers.
Notably, expanding retail networks in tier 2 and tier 3 cities are expected to play a pivotal role in driving this growth. Increased smartphone penetration, enhanced internet access, and rising disposable incomes in these regions have collectively fuelled consumer demand.
Fast delivery
The report highlights the disruption caused by quick commerce, which emphasises fast delivery of essential goods, thereby reshaping traditional supply chains and altering consumption patterns.
This shift signals a fundamental change in how goods are purchased and consumed, particularly in rural areas, where access to e-commerce platforms is rapidly increasing.
India is on track to become the world’s third-largest consumer market by 2030, characterised by heightened competition from direct-to-consumer (D2C) brands and a focused drive toward premiumisation.
Innovative product development tailored to the preferences of young and middle-income consumers further enhances the market’s dynamism.
Rising FMCG exports
Additionally, the rising exports of fast-moving consumer goods (FMCG) are significantly contributing to foreign direct investment (FDI), showcasing the global appeal of Indian products.
A critical driver of this transformative growth has been the substantial rise in rural private consumption, largely attributable to initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), which has led to the opening of over 53 crore bank accounts.
This effort has integrated millions of rural Indians into the formal financial system for the first time, heralding a new era of economic participation.
The government has recognised this phenomenon as a “revolutionary shift,” particularly noting the increase in credit-driven consumption in small towns and cities. According to the central bank, household consumption is expected to grow even more robustly as inflation rates stabilise, bolstered by a revival in rural demand.