India to rank second in the global order of e-commerce market by 2034
India is set to become the second largest e-commerce market by 2034 globally from its current ninth rank, led by increased internet penetration, said Akshay Gulati, Co-founder, Shiprocket, a logistics software platform.
“By 2030, 1.3 billion Indians will have access to the internet and smartphones with 500 million online shoppers,” Gulati said at an interactive session on Day 1 of the two-day Phygital Retail Convention.
With over 800 brands in the D2C (Direct To Consumer) segment, the Indian market size is seen at 60 billion U.S. dollars by 2027 and online adoption has accelerated in the past two years. “There are no borders today for information flow. Trends don’t take 6-12 months to materialise, they happen overnight,” Gulati said, adding that e-commerce penetration in India would double to 15 per cent in FY27 from 8 per cent in FY22.
The rising domestic e-commerce market will also open doors for Indian manufacturers to tap the global market as D2C gains momentum.
Already, India’s post-pandemic exports are at a record high with total merchandise exports at 105 billion U.S. dollars during the third quarter of 2021-22 (Apr-Mar), Gulati said addressing the power-packed audience from the retail and digital space at the convention.
The changing paradigm in consumption and spending through digital mode has re-positioned the brick-and-mortar mall infrastructure into experience centres, according to experts at the convention.
“Private equity, which had so far invested 150 million square feet in offices, had invested 15 million square feet in retail assets and this gap should narrow,” said Rajneesh Mahajan, Chief Executive Officer, InOrbit Malls. “The disruption in retail is being closely watched by the modern retailers from the brick and mortar segment and are waiting for the right signals for the next available opportunity to catapult their business to the next level,” said Pramod Arora, Chief Growth & Strategy Officer, PVR Cinemas.
Earlier, in the day, addressing the inaugural session, Mr. Arvind Singhal, Chairman, of Technopak – a management consulting firm, expected India’s merchandise retail to undergo a paradigm shift in the next decade with the introduction of 5G network and rising per capita income. Mr. Singhal said: “Open Network for Digital Commerce will be the biggest transformation in Indian retail as the 5G network penetrates and facilitates product discovery much faster.”
“Consumption and spending patterns will be more digital and without doubt, it will not be limited to physical retail stores,” Mr. Singhal said. “If India’s per capita consumption crosses the USD 5000 hurdle over the next decade from USD 2000 as of now, then discretionary spending will rise as the country’s merchandise retail will rise to USD 1.8 trillion from the USD 800 billion now,” he added.
As an economy, India will fundamentally be different ten years from now. From being a USD 300 billion economy in 1992 to around USD 3 trillion economy in 2022, the Indian economy would be approximately 1.5 times of what we are today to around USD 7.5 trillion, assuming no adverse impact on USD-rupee parity.