India’s e-commerce market to grow to $38 billion in FY21: Bain & Co estimates

17th August 2021, Mumbai:

A report by consultancy firm Bain & Co estimates, the Indian e-commerce industry will grow 25 per cent to $38 billion in FY21 despite two washout months during the first wave of the pandemic. The report was published in association with Walmart-owned Flipkart. As per the report, by the end of FY22, the industry’s sales will amount to $47.5 billion.

It has on boarded around 35 million new customers since the onset of the pandemic. Its user base has jumped to 140 million, and is expected to surpass the 150-million-mark in the ongoing financial year. This year, the revival in online shopping has been gradual. Growth in non-metro markets has been higher than in metros, says Shyam Unnikrishnan, Partner, Bain & Co.

The online shopper base has expanded with the inclusion of small towns, women and older shoppers. Growth across categories has been disparate throughout the pandemic, adds Arpan Sheth, Senior Partner, Bain & Co. The outbreak also caused a one-time spurt in demand for mobile phones and other electronics categories. However, they did not see as substantial a jump during the second wave in April–May 2021, he added.

According to him, essential categories such as grocery, household items, and personal care saw continued acceleration. Aided by the pandemic, e-tail reach, including grocery, has gone up to around 4.6 per cent in FY21 compared to 3.5 per cent a year ago.

The difference in average selling prices in metros and non-metros continues to narrow, while rural markets are driving the growth revival. Consumers who moved online to order groceries and other essentials are staying back with companies like BigBasket, Grofers, Amazon India and Flipkart, scaling up their infrastructure to meet the steady growth in demand for essentials. According to the report, online grocery grew by 80 per cent in FY21. Practically all ecommerce and grocery platforms are rolling out express delivery options to deliver essentials in an hour or less.

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