08 August 2023, Mumbai
Key Drivers of Growth, Trends
A joint report by e-commerce facilitator Shiprocket and ONDC has forecast that consumer spending in India is poised to surpass $4 trillion by 2030, propelled by a robust compound annual growth rate (CAGR) of 10%.
The report, titled "eCommerce In The New Bharat And Its Future," was unveiled during Shiprocket's esteemed SHIVIR summit in 2023.
It highlights a number of key drivers of this growth, including:
Technological advancements in consumer goods
Escalated internet penetration
A thriving local consumer ecosystem
Evolving expenditure trends
Rising participation of the female workforce
Supportive policies like Make in India and Aatmanirbhar Bharat
Kickers:
The report underscores the influential role of India's youthful demographic, with a median age of 31 by 2030, in driving this growth trajectory.
The study accentuates the substantial potential in catering to millennials and Gen Z, who are projected to comprise 77% of India's populace by 2030.
These young consumers are increasingly tech-savvy and have a growing appetite for online shopping.
They are also more likely to be open to trying new brands and products, which presents a significant opportunity for Indian businesses.
The report also highlights the importance of technological advancements in consumer goods.
The rise of smartphones, e-commerce platforms, and digital payments is making it easier and more convenient for consumers to shop online. This is expected to further accelerate the growth of consumer spending in India in the coming years.
Trends in Online Shopping:
The report also provides insights into the latest trends in online shopping in India. It finds that categories such as food, housing, apparel, transportation, communication, and personal care are anticipated to witness a twofold surge in spending by 2030.
E-commerce is positioned as a pivotal catalyst for this burgeoning consumer outlay, as nearly 80% of consumers now prefer online marketplaces.
The report emphasizes that a substantial 76% of consumers opt for prepayment.
Notably, UPI emerges as the favored choice (57%), followed by credit cards (31%), and other alternatives like wallets, net banking, and debit cards (12%).
The report envisions UPI's popularity leading to a noteworthy 34% decline in cash transactions and an impressive 88% surge in digital payments by 2026.
Opportunities for Indian Brands:
The report also highlights the significant opportunities for Indian brands to expand their reach and grow their business in the global market.
It finds that currently, fashion and lifestyle dominate online shopping trends, accounting for 48% of purchases, trailed by electronics (32%) and groceries (30%).
The report unveils that over 50% of Indian consumers prioritize product quality when making online purchase decisions.
This presents a major opportunity for Indian brands to showcase their high-quality products to a global audience.
However, the report also finds that a staggering 72% of Indian brands have yet to explore international sales.
This presents a significant growth opportunity, as both local and international consumers express keen interest in acquiring Indian products.
Short & Long
The report concludes that the Indian consumer market is poised for explosive growth in the coming years.
This growth will be driven by a number of factors, including a young and tech-savvy population, a thriving local consumer ecosystem, and rising disposable incomes.
Indian businesses that are able to capitalize on these trends will be well-positioned to succeed in the global market.
