India’s e-commerce market likely to more than double to $300 billion by 2030, says BCG

New Delhi: India’s online retail and services market is expected to more than double over the next five years, with the next phase of growth driven by smaller cities and middle-income groups, according to Boston Consulting Group (BCG).

The e-commerce market is projected to grow from around $140 billion at present to up to $300 billion by 2030, BCG said in its latest report. However, online spending will account for only 7-8% of total consumer expenditure, highlighting headroom for future expansion.

The report estimates that the nation’s total consumer spending across products and services is expected to rise up to $3.7 trillion by 2030, up from $2.3 trillion in 2025. Despite the rapid rise of digital commerce, the report underscored the parallel expansion of offline retail, which grew at 13-14% annually over the last four years.

Within e-commerce, online retail is projected to more than double from $75-85 billion in 2025 to $170-180 billion by 2030. E-services, including travel, dining, education, insurance and online subscriptions, are estimated at $120-130 billion by 2030, up from $45-55 billion in 2025.

Still, India’s online retail penetration remains modest compared with global peers. E-retail accounts for 6-7% of total retail spending in India in 2025, compared with 31-33% in China and 15-17% in the US, the report noted.

The number of online shoppers is projected to increase from 280–300 million in 2025 to 420–440 million by 2030. This is expected to be increasingly driven by smaller cities and middle-income segments as digital access and logistics infrastructure deepen. Around 30% of current online shoppers come from rural India, while nearly 45% are women, reflecting the widening demographic base of digital commerce, it said.

India’s commerce landscape is evolving into a “connected commerce” model, where online and offline channels operate in tandem rather than in competition, according to the report. It notes that 90-95% of online shoppers also purchase offline, while nearly half of offline shoppers use digital channels for research before making purchases.

Quick commerce boom

BCG highlights an accelerating premiumization trend, with rising disposable incomes leading consumers to trade up across categories such as apparel, beauty, electronics and home products, supporting higher average order values.

“Category-focused platforms account for roughly 63% of total e-commerce spending, while horizontal marketplaces contribute around 31%, reflecting diversification in digital formats. Emerging models such as quick commerce and social and chat commerce have grown at over 50% CAGR (compound annual growth rate) between 2021 and 2025, outpacing overall e-commerce growth,” it added.

Quick commerce alone has emerged as a $7-8 billion market in FY25, expanding at 110-130% CAGR over 2021–25, particularly in grocery and essentials, and is becoming structurally important in metros with rising order frequency and basket sizes. Social and chat commerce is also expanding rapidly, particularly in urban centres and tier 2 and 3 cities.

The BCG report further pointed to rising participation of micro, small and medium enterprises (MSMEs) and sellers on digital platforms, supported by improvements in logistics networks and digital payments infrastructure, which could have longer-term implications for formalization and export enablement.

“There is a strong case of India playing an important role in global e-commerce fulfilment through its GCCs (global competency centres)," said Ravi Saxena, chief executive officer (CEO) and founder of Wonderchef, a kitchenware manufacturer. "Besides this direct employment, there is the snowball effect of increased consumption leading to higher employment in MSMEs who are able to supply to brands but also list their products directly and become marketers as well.”

According to the BCG report, nearly 90% of small online businesses reported growth in sales, with many also expanding employment, while the time taken for brands to scale to ₹100 crore in revenue has reduced from 11 years to 7 years, and innovation cycles have become two to three times faster for online-led players.

Still, by 2030, with online penetration still below 10% of total consumption, digital commerce is expected to remain a relatively small but fast-growing part of India’s overall retail and services economy, indicating that the next phase of growth will likely come from deeper integration of digital capabilities into a largely offline consumption base.

“India’s shoppers are becoming more diverse, with consumers using different formats depending on their needs and maturity. As the demographic mix of online shoppers becomes more democratic, platforms and brands must design simpler, safer, and more seamless experiences across touchpoints,” said Kanika Sanghi, partner and director, BCG. “The opportunity now is to reduce friction, build trust, and make multi-format journeys feel intuitive for every shopper.”

McKinsey sees $200 bn market by 2030

McKinsey & Co., in a separate report released earlier, estimates that India’s e-commerce market could grow to $180-200 billion by 2030 from $70-80 billion in 2024, with nearly half of the incremental gross merchandise value (GMV) expected to be driven by MSMEs.

While traditional marketplaces will continue to account for around half of the growth, the rest is likely to come from direct-to-consumer (D2C) channels and quick commerce platforms, said McKinsey.

As MSMEs look for more flexible and lower-cost ways to reach consumers, alternate channels such as brand-owned websites, social media storefronts and quick commerce are expected to play a larger role in shaping the next phase of India’s digital commerce expansion, it said.

The McKinsey report highlighted that social commerce is redefining product discovery and engagement, emerging as a powerful catalyst for MSME-led growth in India.

The McKinsey report noted that Instagram and Facebook advertisements are now outpacing search engines and traditional e-commerce marketplaces as primary discovery channels for MSME brands.

Meanwhile, the rapid expansion of digital commerce has also led to a rise in consumer complaints. According to data released by the Department of Consumer Affairs, e-commerce companies accounted for the largest share of refund disputes handled by the National Consumer Helpline (NCH) over the past nine months, Mint reported on 17 February. Between 25 April 2025 and 31 January 2026, the NCH facilitated refunds amounting to ₹52 crore across 31 sectors by addressing 79,521 consumer complaints related to refund claims. The e-commerce sector alone accounted for 47,743 grievances and ₹36.79 crore of refunds—nearly 70% of the total amount facilitated during the period.