India’s mass consumers to lead e-commerce market by 2030: Report

The report categorizes households earning between INR 2.5 lakh and INR 10 lakh annually as "mass" consumers, while those earning above INR 10 lakh are considered "affluent”

July 27, 2023

The mass consumer segment is projected to contribute around US$ 135 billion (45%) to the Gross Merchandise Value (GMV) of the e-commerce market by 2030

A significant is predicted in the number of households engaging in e-commerce transactions, from 60-70 million in 2022 to 120-130 million by 2030

Large horizontal players, such as Amazon and Flipkart, led 60-70% of the sales of e-commerce in 2022

75% of mass consumers belong to Gen Z and the millennial demographic

Indian consumers with annual incomes ranging from INR 2.5 lakh to INR 10 lakh will be responsible for driving nearly half of the growth in India’s US$ 300 billion e-commerce market by 2030, according to a report from strategy consulting firm Redseer. 

The report categorizes households earning between INR 2.5 lakh and INR 10 lakh annually as “mass” consumers, while those earning above INR 10 lakh are considered “affluent”.

According to the report, the mass consumer segment is projected to contribute around US$ 135 billion (45%) to the Gross Merchandise Value (GMV) of the e-commerce market by 2030. Moreover, it is expected to account for US$ 1.3 trillion in the overall Indian retail market during the same period.

The report predicts a significant increase in the number of households engaging in e-commerce transactions, from 60-70 million in 2022 to 120-130 million by 2030. Notably, mass consumers are anticipated to drive over 80% of this growth.

Within the mass consumer market valued at US$ 15-20 billion in 2022, large horizontal players, such as Amazon and Flipkart, led 60-70% of the sales. Smaller vertical players, on the other hand, accounted for 30-40% of the sales and concentrated on specific product categories.

The report highlights that approximately 75% of mass consumers belong to Gen Z and the millennial demographic. Gen Z shoppers, the younger generation, showed a preference for electronics, apparel, and Beauty and Personal care (BPC) products, whereas millennials were more inclined towards value-driven products like food, groceries, and apparel.

Gen-X represented around 13% of the mass market and allocated a higher share of spending to food and groceries, followed by health and wellness products. Despite distinct characteristics, Gen Z was also found to be value-conscious at its core.

The report emphasized the significance of value-oriented online shopping. The top three factors influencing purchasing decisions were identified as prices, deals, discounts on e-commerce platforms, product quality, and trust in the platform.

Interestingly, 60% of mass consumers were willing to buy unbranded products if they found the quality appealing, while 30% preferred unbranded items over branded ones.

Source: Economic Times

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