The segment is expected to clock $55 billion in sales, up 45% from last year
The online retail market is expected to see its biggest year-on-year growth till date, as the sector looks to clock almost $55 billion in sales in 2021, according to estimates from management consultancy RedSeer.
This is a 45% jump from last year when overall sales or total gross merchandise value (GMV) of goods sold on e-commerce stood at $38 billion.
The growth, this year, is expected to come on the back of new shoppers being added to the fray. The new crop of direct-to-consumer (D2C) brands selling to customers directly online are expected to further bolster the growth of the sector.
In spite of a pandemic year, e-commerce added 20 million new shoppers in 2020. However, this is expected to double in 2021, as 40 million new customers actively come to shop on e-commerce platforms, taking the overall user base to 190 million users by 2021-end, RedSeer estimates.
With its emergence, India is set to become the third largest online retail market globally, next to US and China, clocking GMV worth $350 billion by 2030, RedSeer said. The growth in online retail is expected to be further fueled by 88% of the new online shoppers that will be added over the next decade (2020-2030) from Tier 2, 3 and 4 cities.
These shoppers from India’s small towns and cities will cumulatively contribute to $150 billion of e-commerce GMV in the coming decade, until 2030, RedSeer data showed. New models in e-commerce, including social commerce, video and influence-led commerce will lead to higher penetration of online retail in India’s small towns and cities.
“The pandemic has caused an inflection point for e-commerce in the country. At present, more than 50% of online shoppers are using e-commerce for convenience. This is a far departure from earlier estimates when 70% of online shopping used to be driven by heavy discounting. In the first six months of 2021, e-commerce continues to grow in double digits, and with the second half of the year loaded with sale events, this growth will only bolster further," said Mrigank Gutgutia, director, e-commerce, RedSeer Consulting.
Gutgutia adds that the impact of lockdowns relating to the second wave of the virus has been far less on e-commerce, with online sales trading 70% higher, between April-June quarter, compared to the same period, last year.
In addition to this, India’s consumer digital economy, which includes cab-hailing and mobility services, is expected to touch $800 billion by 2030. With its rise, e-commerce will contribute to 40% of non-grocery retail in India, which includes electronics and fashion; and 6% of the overall medicine and grocery purchases in the country by 2030.
With the likes of JioMart, Flipkart and Amazon India now turning towards kiranas to make express hyperlocal deliveries, Indian kirana stores are expected to clock approximately $1.5 trillion in sales by 2030.
To keep pace with growth in online retail, the logistics sector is expected to employ 500,000 gig workers in 2021. Logistics firms in India clocked over 3 billion shipments in 2020, of which 850 million were driven by third-party logistics players.
Further, new-age logistics players have reduced the average time of delivery by two-third in the last seven years, as they leverage automation at different layers of the process.
By the end of 2020, Tier 2,3 and 4 cities in India accounted for more than 50% of shoppers for Indian e-commerce.