Post Date : August 18, 2021
The ever-going internet user base and more people embracing online shopping has upstaged the Indian value e-commerce market, and it is expected to touch USD 40 billion by 2030, up from USD 4 billion in 2019, a report by Kearney said. Value e-commerce is the online business model that serves value lifestyle retail.
The report titled “Value E-commerce: The next big leap in India’s retail market” highlights that the expanding digital footprint in tier III and IV areas as well as in rural India, along with the aspirational needs of these consumers and their changing attitudes towards online buying presents a massive opportunity.
Currently estimated at USD 4 billion, the value e-commerce market is expected to see rapid growth and reach USD 20 billion by 2026, and USD 40 billion by 2030, it said.
Further, it said that the value lifestyle retail market is expected to grow from USD 90 billion in 2019 to USD 156 billion by 2026, and touch USD 215 billion by 2030.
The categories included in the report are apparel, footwear, fashion accessories, cosmetics, small appliances, and home and living.
As retail in India bounces back from COVID, the growing number of value-conscious online shoppers is reshaping India’s e-commerce landscape. This value segment is pegged to grow rapidly and emerge as a USD 215 billion-plus market by 2030.”~ Siddharth Jain, Partner, Kearney
He added that while only 4% of this demand is today served by online channels, this will rise to 19% by 2030.
“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,” he added.
Currently, about 70% of lifestyle retail demand comes from the value lifestyle segment, which is dominated by unorganized general trade (nearly 80% share) and modern trade is at 16%, while e-commerce has a low penetration at around 4%.
The reports suggest that by 2030, unorganized general trade is to account for about 57% share, modern trade 24%, and e-commerce at 19%.
Furthermore, it pointed out that almost all value lifestyle consumers spend a lot of time finding and evaluating products before they buy them because of their strict budgets.
Also, when purchasing a value lifestyle product, consumers look for the best deals, with the biggest discount or markdown, which has a huge impact on their decision making when making the purchase, it said.
It further underlines that the value lifestyle consumers are more likely to have less brand loyalty as they are more focused on bagging the best quality product at the best prices. Their purchase is also highly influenced by friends, family, and social media.
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 the needs of India-2 will emerge strong contenders to capture this USD 40 billion markets.”~ Karan Dhall, Partner, Kearney
The report also provides an overview of the efforts being made by various e-commerce companies in India like Snapdeal and Lenskart to align themselves to the needs of the value-conscious segment.