Online retail sales in India expected to reach $85.5 billion by 2025

The 2021 Indian fiscal year report revealed that due to the epidemic blockade, the gross domestic product (GDP) shrank by 7.3%. However, online retail grew by 5%, increasing sales by US$1.6 billion. This indicates that India 's online retail market will get back on track and develop at a faster pace.

According to a Forrester report , India's online retail market is expected to grow at a compound annual growth rate of 19.8% to reach $85.5 billion by 2025.

The report said that the growth of India's online retail industry will be influenced by a number of factors, including opportunities brought by global investment, the expansion of the online shopping community and changes in consumer preferences . In 2020, online accounted for 3.6% of India's total retail sales , and this proportion is expected to rise to 6% by 2025.

In addition, Forrester listed India as a " huge development market for online retail " in its report . This can be seen from the fact that local and international organizations invested more than US$8 billion in online retail in 2020 and 2021 .

The increasing number of Internet users in rural and urban India has led to an increase in online consumption behavior among this group. The number of online buyers in India has grown from 71.5 million in 2016 to 179.5 million in 2020. From 2020 to 2025, India's overall online buyer population will grow at a compound annual growth rate of 10.1% , and the total number of online buyers is expected to reach 291.2 million by 2025.

Online consumption categories have also changed during the pandemic . Before the pandemic, online retail sales of smartphones, computer hardware and software, and consumer electronics grew significantly, making them the main categories of online consumption in India. But after the pandemic began, groceries and personal care products saw more growth , becoming the new trendsetter for online consumption .

In 2020, India 's online retail sales were $34.7 billion, of which smartphones accounted for $13 billion, or 38%, followed by clothing accessories at $3.7 billion , or 11%, and groceries at $2.9 billion , or 8% .

According to Forrester Analytics, in terms of e-commerce trading platforms, two-thirds of Indian online consumers who purchased products online in the past three months bought from Flipkart or Amazon, and a quarter bought from Paytm. In addition, 64% of Indian online consumers spent more than 5,000 rupees online.

According to reports, the duopoly of Amazon and Flipkart is fast becoming a four-way contest as Reliance Digital and Tata join the fray. Based on current market developments , it is expected that Flipkart, Reliance, Amazon and Tata will own more than 80% of the Indian online retail market .

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