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India’s e-commerce user base will surpass the US in two years, according to a Bain analysis


According to a report by consulting firm Bain & Co and homegrown e-tailer Flipkart, e-commerce in India is predicted to grow at a rate of 25–30% annually for the following five years, with a steady increase in the user base that is predicted to surpass the second largest ecommerce shopper base – the United States – in the next one or two years.

The number of online shoppers in India, which was 180–190 million in 2021, will rise to 400–450 million by 2027 when it is predicted that the sector will be worth more than $150 billion. According to the report, the e-commerce business will be worth $50 billion this year, up 40% over the previous year.

With the rate of development, we are predicting, Manan Bhasin, partner at Bain & Co., predicted that we would soon surpass China as the second-largest shopping base. As internet commerce expands across the nation, it is anticipated that the balance of categories will change, with rising demand for food, clothing, and other categories.

According to Bhasin, the proportion of fashion in overall ecommerce sales will probably rise to 25–30% from 20–25% today. According to him, “Fashion will continue to be the gateway area for ecommerce moving forward throughout the years since most frequently, users will buy fashion products as their first online purchase.”

The signature Christmas sale events for ecommerce companies like Flipkart and Amazon are off to a promising start, according to research from earlier this month, with consumer demand returning online across categories. Additionally, Bhasin stated that holiday sales were “very high across platforms.”

Ecommerce user base in India to outpace US in two years: Bain report

The Indian e-commerce market is broken down into three phases by Bain.

The first period spans from the beginning of e-commerce until 2015, when cash-on-delivery was first launched and experienced “cautious early adoption” in major cities. The “massification” phase, which lasted from 2015 to 2020, saw an increase in customers in tier-2 cities, faster delivery times, and the emergence of affordability strategies like buy-now, and pay-later.

We are currently in the third phase of e-commerce, which Bhasin described as an innovative time marked by the emergence of new business models and micro-segments.

He claimed that distinct groups, including Gen-Z users, low-income users, and users from tier-1 cities, were starting to emerge in the e-commerce client base. Different business strategies, such as rapid commerce and social commerce, are aimed at them.

However, given that 400 million people in India use their cell phones to watch a video, features like live streaming and video commerce have a lot of potential and present a huge opportunity, according to Bhasin.

Marketplaces and short video platforms are the two types of platforms that provide live and video commerce, he explained. Strong authors and content, a recommendation engine, and commerce integration are the three moats in this method of promoting commerce.

 

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