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Jul, 2021     

Decode Digital Economy through our lens

Of digital economy, online retail remains a big part which will likely touch $350B GMV by 2030


Last week, we unveiled a number of new and interesting insights during our flagship event Ground Zero 5.0. The day-long event focused on digital economy and the crucial topics under its umbrella including online retail, elogistics, fintech, IPO among others.

Here is a quick recap of the key insights that were shared on digital economy, online retail and elogistics.

1. India’s digital economy to touch $800 billion by 2030

Consumer Digital Economy – Consumer Internet Spend USD Bn, % of Private Consumption, CY 2015 – CY 2030F

India’s consumer digital economy which was pegged at USD $85-90 billion in CY 20, is expected to become a USD $800 billion market by 2030.

Today, 50% + customers say they use online services because of convenience. Few years back almost 70% + used to say the key reason is discounting but with the hit of Covid, digital services have undoubtedly served the customers very well, which is evident in high customer satisfaction and customers willingness to keep using the digital as a key channel to fulfill their needs. The next wave of entrepreneurs will create innovations which will make the Indian model successful globally.”

2. Of digital economy, online retail remains a big part which will likely touch $350B GMV by 2030

Online Retail GMV- CY15-30 estimates for all countries, USD Bn

Online retail is set to become the third-largest online retail market by scale by CY30 with an annual gross merchandise value (GMV) of $55 billion in CY21 and $350 billion in CY30. 88% of the online shoppers that will be added between 2020-2030 will be from Tier 2+ cities. Further, $5-7 billion cumulative incremental online retail transactions to be added from Tier 2+ city customers over CY20-30 while $~150 billion cumulative incremental online retail GMV to be added from Tier 2+ city customers over CY20-30.

3. Concurrently, India’s online shopper base to be the second largest globally

The adoption factors that will drive the growth for e-tailing and overall online shopper base in the next few years are:

  • Companies have started to focus on tier 2 cities
  • Growing online spends by ‘Digital Natives’ and supply-side innovations
  • COVID-19 has caused an inflection in e-commerce penetration across city tiers
  • Lowering costs of servicing tier-II and other smaller cities

4. While organized retail will be leapfrogged by online retail before CY30, kiranas will remain strong

While online retail is expected to leapfrog organized retail, kiranas will continue to be resilient. Kiranas are expected to approximately achieve a $1.5 trillion sales by CY30. The growth will be driven by:

  • Platforms that are enabling these kiranas technologically and digitally
  • Cashless payments
  • Book Keeping and EB2B offerings

5. In India, online retail enabler e-logistics has also become the fastest growing market globally

Note (s): Shipment volume includes eTailing, hyperlocal and eB2B commerce

E-Logistics in India has become the fastest growing market globally with over 3 billion shipments in 2020. India traditionally had an inefficient supply chain with a slow and undemocratic access. Today ~ 90%+ of the orders fulfilled by the online commerce get done by the new age logistics, an industry which has come up only in the last one decade and has solved for the above challenges through technology and customer centric mindset. Further, three out of the top 10 logistics players in India are today the new age (e- logistics) players.

New age logistics players have reduced the average time of delivery by 2/3rd in the last 7 years, have covered nearly all the pincodes across India through enabled deep tech solutions to serve the different type of customer needs and requirements like same day delivery, hyperlocal, service enabled etc. Increasing coverage across India and faster delivery, enabled Tier-2+ cities to account for 50%+ shoppers to Indian eCommerce by the end of 2020.

The trends show that it’s only the tip of the iceberg, and it’s a long way ahead for the new-age economy.