According to research by Kearney, the value e-commerce industry in India is anticipated to reach USD 40 billion by 2030, up from USD 4 billion in 2019. This is due to significant growth in internet users and as more people adopt online buying.
According to the report titled “Value e-commerce: the next big leap in India’s retail market,” the expanding digital footprint in tier III and IV areas, as well as rural India, along with the aspirational needs of these consumers and their changing attitudes toward online buying, present a massive opportunity.
The value e-commerce industry, which is now valued at USD 4 billion, is anticipated to develop rapidly, reaching USD 20 billion by 2026 and USD 40 billion by 2030, according to the report.
In the meanwhile, the value lifestyle retail industry is anticipated to increase from USD 90 billion in 2019 to USD 156 billion by 2026, reaching USD 215 billion by 2030, according to the report.
Apparel, footwear, fashion accessories, cosmetics, minor appliances, and home & lifestyle are all included.
“The rising number of value-conscious online customers is changing India’s e-commerce market as retail in India recovers from COVID. By 2030, this value sector is expected to develop significantly, reaching a market size of USD 215 billion or more,” Siddharth Jain, a partner at Kearney, explained.
He went on to say that while online channels now service just 4% of this demand, this would increase to 19% by 2030, generating a USD 40 billion markets for value e-commerce in India.
“We expect the number of internet users in India to surpass 1,100 million people by 2026 – and a third of these will be active online buyers. We believe that the needs of value lifestyle consumers will increasingly be met by differentiated business models and online channels,” it added.
Currently, the value lifestyle sector accounts for around 70% of all lifestyle retail demand. Unorganized general trade (almost 80% market share), contemporary trade (16%), and e-commerce (4% market share) dominate this category.
Unorganized general trade is expected to account for roughly 57% of total trade by 2030, with contemporary trade accounting for 24% and e-commerce accounting for 19%.
Because of their tight budgets, virtually all value lifestyle customers spend a lot of time discovering and analysing items before purchasing them, according to the survey.
Furthermore, value lifestyle shoppers look for the greatest discounts, frequently choosing items with the largest discount or markdown, which can be a major influence in their decision to buy, according to the report.
According to the research, value lifestyle customers are less loyal to brands and are more concerned with receiving the greatest quality in their desired price range. Friends, family, and social media may have a big impact on them.
The research included an overview of the efforts being made by major Indian e-commerce businesses, such as Snapdeal and Lenskart, to align themselves with the demands of value-conscious consumers.
The report’s case study on Snapdeal focused on how the firm has redefined its e-commerce strategy by focusing solely on value lifestyle e-commerce.
Modern format value retailers like V-Mart are working to extend their e-commerce platforms, according to the research.
“Value lifestyle retail is pegged to grow to USD 215 billion markets, driven by India-2 (mainly mid to low income in tier II towns) their online purchase behavior is set to increase the value e-commerce market…
“Online players that craft a sharp value proposition around relevance, convenience, and trust, focused on needs of India-2 will emerge strong contenders to capture this USD 40 billion markets,” Kearney Partner Karan Dhall said.
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