Tata, Reliance moving towards top positions in India’s ecom space: Forrester

21 March 2022, Mumbai:

Ending Amazon-Flipkart duopoly, Tata and Reliance will soon be among India’s online retail space at the top, says a new study by US-based research and advisory firm Forrester.

Indian online retail market will soon witness four-way competition, says the report, ‘The State of Online Retail in India’.

Together, these four companies own more than 80 percent of India’s online retail market each maneuvering to outstep others.

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Tata Group is developing a super app to increase its e-commerce share. It has already acquired platforms like Bigbasket and 1mg.

Reliance is building its e-commerce platform Jiomart with several acquisitions made over the last year, including quick commerce platform, Dunzo in January. The Tata Group is also seeking the approval of the National Payments Corporation of India (NPCI) to operate on Unified Payments Interface (UPI) as a third-party payments service provider offering digital payments services.

Forrester report says, for the first time in many years double-digit increase, India’s overall retail growth slowed in FY21 as the gross domestic product (GDP) shrunk to 7.3 percent amid lockdowns.

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However, online retail grew 5 percent and added $1.6 billion in sales. India’s online retail market growth is expected to accelerate around 20 percent every year to reach $85 billion by 2025, predicts Forrester. The online retail market is will reach $50 billion in 2022 and $60 billion in 2023, the report says.

Forrester predicts online smartphone penetration will taper off post-pandemic due to longer lifecycle, chip shortage, and logistics costs increasing the price of products.

Lifestyle, which mainly includes fashion, is set to make a comeback. Most online retailers will focus on personalization to achieve differentiation, for instance, tailoring experiences based on geography and shopping behavior, adds the report.

Forrester's survey found 77 percent of metro Indian online adults will use both online and offline sales channels, indicating a growing trend of digital and physical integration.

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