India’s e-retail sector tops $65 bn; likely to grow over 20% till 2030

New Delhi: India's online retail market capped 2025 with renewed vigour as e-retail gross merchandise value (GMV) scaled to nearly $ 65-66 billion, growing 19-21 per cent in value terms, according to a report by Bain & Company compiled in collaboration with Flipkart.

The report - How India Shops Online 2026 - sees India's e-retail market at $ 170-180 billion by 2030, sustaining 20 per cent-plus annual growth, propelled by rising shopper penetration and spend per shopper.

It said India has emerged as a global leader in quick-commerce (a term that denotes instant and ultra-fast local delivery service), with 16-17 per cent of e-commerce GMV flowing through q-commerce, significantly ahead of most markets, including China.

The segment has doubled annually over the past two years, reaching $ 10-11 billion GMV (or total sales value) in 2025.

Looking ahead, it is expected to reach $ 65-70 billion by 2030 and contribute 45-50 per cent of incremental e-retail GMV as traditional e-retail continues to anchor the overall e-retail market with 60-65 per cent share by 2030. The report said that overall growth also accelerated through the year, supported by improving macroeconomic conditions and consumer sentiment.

The private consumption growth rose from 8 per cent (2022-24) to 10.5 per cent in 2025, driven by GST cuts, income tax relief, easing inflation, and lower lending rates.

"This momentum drove second-half growth of 22-24 per cent and an estimated 23-25 per cent growth in Q1 2026, reflecting a broader revival in consumption and discretionary spending," the report said.

As per the report, India is emerging as a critical global consumption engine, poised to capture 1 in 8 incremental consumption dollars over the next five years.

While India's e-retail market witnessed a healthy growth in the previous year, the broader retail sector's trajectory towards $ 1.6 trillion by 2030 underscores that offline infrastructure remains indispensable to reaching the majority of Indian consumers. India's online shopping market has more than doubled over the last five years, with the shopper base doubling to 290-300 million shoppers in 2025, supported by rapid seller ecosystem expansion (that tripled over the past five years) and deeper geographic penetration.

"Gen Z has emerged as a critical cohort accounting for 40-45 per cent of e-retail shoppers, contributing 50 per cent of incremental e-retail orders in 2025, with 2.5x (times) faster spend per shopper growth versus other cohorts in metros," it observed.

This generation of customers demonstrate distinct shopping preferences across categories like lifestyle, beauty and electronics, such as influencer-led trend discovery on social media, immersive videos/feeds, and use of instant credit. Growth is increasingly well diversified geographically, with Tier II plus cities contributing about 50 per cent of incremental online orders in 2025, despite shopper penetration of just 25-30 per cent of internet users (against 45-50 per cent in Metros/Tier 1).

Shyam Unnikrishnan, Managing Partner at Bain & Company, said as India's GDP per capita approaches the $ 4,000 inflection point, where discretionary spending has historically accelerated in other emerging markets, this will provide further tailwinds for e-retail.

The next five years will certainly unlock the next wave of growth in India's e-retail market, Unnikrishnan said.

The strong expansion notwithstanding, India's e-retail penetration remains structurally low at about 1.6 per cent of GDP, compared to other parts of the world -- 13-14 per cent in China and 4-4.5 per cent in Indonesia -- indicating a substantial long-term runway for growth.

The majority of the next 500 million shoppers are already in the digital funnel, with only 30 per cent of internet users shopping online (compared to 92 per cent in China and 74 per cent in the US), the report said, noting "a large untapped base remains".