India’s e-commerce to grow to $112 billion by FY25: Goldman Sachs

According to estimates by Goldman Sachs, India’s e-commerce sector — especially grocery — is forecasted to grow to $112 billion by FY25. Amazon, Flipkart and Reliance Industries would be the key players in this segment with RIL’s push initially likely to be in grocery/FMCG, and over time into categories such as apparel and electronics.

Three-four players are likely to co-exist in the Indian e-commerce space, given the size of the vertical, says Goldman Sach. Advertising will emerge as the second-largest after e-commerce, which also includes OTTs. The dominance of Google and Facebook will sustain, with some incremental market share to telcos including Reliance Jio, Bharti Airtel,etc. Within video/audio OTT, advertisement will continue to contribute more than 50 per cent of segment revenues.

Other categories like travel would also see growth in traction in the online space and drive the growth for sectors like hotels. MakeMyTrip continues to be the dominant platform here with more than 50 pere cent market share currently, and according to Goldman Sachs, there’s not room for more than two platforms to co-exist in this space.

The addressable market for segments such as food delivery and ride-hailing will be limited to less than $10 billion by FY25 as these services are likely to stay restricted to key urban centres in terms of volume contribution.

Goldman Sach says, fintech in India is estimated to be a $2.5 billion revenue pool by FY25, split 20 per cent-60 per cent-20 per cent between payments, lending and insurance. Digital payment platforms are expected to process more than $200 billion of merchant payments annually by FY25 and WhatsApp has the potential to become the dominant platform in payments, given its high traffic.

However, profitability would remain elusive as categories such as online retail, grocery, food delivery and fintech will face stiff competition.