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Separator

Online Retail Sector Anticipated to Grow between 23 Percent, 25 Percent by 2028

CIO Insider Team | Wednesday, 13 December, 2023
Separator

According to a joint analysis by e-commerce giant Flipkart and consulting company Bain & Company, the online retail sector is anticipated to continue growing at a rate of between 23 percent and 25 percent per year by 2028.

An estimated $300 billion will be spent on consumer technology in India by 2027, according to projections from investors, consulting firms, and consumer internet companies.

By 2028, it is expected that the internet retail sector would reach a valuation of over $160 billion.

According to a report by Google, the consultancy and market research firm 1Lattice, and the venture capital firm Chiratae Ventures, the size of the Indian consumer internet segment will almost quadruple to $300 billion by 2027 from its current level, with the fashion, mobility, and media sectors leading the way.

The Bain-Flipkart analysis predicted that the online retail market will reach $57–60 billion by the end of 2023, an increase of 17–20 percent from the previous year.

In Indian online shopping, this translates to 240 million to 260 million annual transactional shoppers; yet, online purchasing will still account for only 5 to 6 percent of total retail spending.

According to the Bain analysis, "growth in GDP per capita—which is frequently interpreted as a measure of purchasing power—will be critical to unlock e-retail growth over the next decade."

By contrast, online retail accounts for about 35 percent of retail spending in China and roughly 24 percent of total retail spending in the US.

Business models like quick commerce, fast fashion, hyper-value platforms and live commerce will be essential in driving the penetration of online retail in the country, said Sankalp Mehrotra, vice president of monetization at Flipkart.

According to the Bain analysis, "growth in GDP per capita—which is frequently interpreted as a measure of purchasing power—will be critical to unlock e-retail growth over the next decade."

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