Government initiatives like 'Digital India' and rapid improvements in the country's logistics and supply chain networks have also contributed in boosting the growth
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E-commerce has become a centre of change for the retail industry in India, expecting to touch USD 550 Bn by 2035, growing at a CAGR of 15%, as per a report released by ANAROCK and ETRetail on Thursday.
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In 2024, the value of this retail segment was estimated at USD 125 Bn and is expected to touch USD 345 Bn by the end of 2030.
The main driving forces for this growth are the increasing internet penetration, smartphone adoption, digital payment, and a tech-savvy population, as per the report.
According to Anuj Kejriwal, CEO and managing director of ANAROCK, “Besides the metros, e-commerce players are also tapping the growing demand from smaller towns and cities. Resultantly, the share of online shoppers from Tier 2 and 3 cities has increased to 56% in FY2024 from 46% in FY2020, and is expected to reach 64% by FY2030."
“Meanwhile, the overall Indian retail industry's market size is expected to touch USD 2,500 Bn by 2035, witnessing a three-fold increase compared to 2019,” he added.
Government initiatives like 'Digital India' and rapid improvements in the country's logistics and supply chain networks have also contributed in boosting the growth, as per the report.
It states that the industry is defined by sprawling malls and thriving e-commerce alongside traditional bazaars. Highlighting that this increasing growth is due to rising disposable incomes, increasing urbanisation, a young population, and an ever-expanding middle class.
Kejriwal further said that the supply across the new malls in top 7 cities across India was low.
"New mall supply across the top 7 cities was a mere 1 Mn sq. ft. in 2024, while absorption stood at 6 Mn sq. ft.”
“New supply is lagging far behind demand. Current supply and demand trends for mall spaces indicate a post-pandemic rebound in leasing, now largely driven by experiential retail. Apparel and the F&B sectors consistently contribute nearly 45% of demand, remaining the top footfall drivers.”
Moreover, he highlighted that the mall vacancy has seen a decline after Covid.
“Also, post-COVID, the mall vacancy rate has declined from 15.4% in 2019 to 8.1% in 2024,” he said.
According to the report, there is a surge in the number of malls in tier 2 and tier 3 markets, which could total over 26 million square feet of mall space by 2030, as a result of major domestic and international retailers' plans to expand their presence in India's smaller towns and cities.
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