E-commerce continues to drive significant transformation in India’s retail industry, according to ANAROCK latest report. The report highlights that the Indian e-commerce market is projected to grow at a compound annual growth rate (CAGR) of 15 per cent, reaching a remarkable USD 550 billion by 2035.
The sector, which was valued at USD 125 billion in 2024, is poised for rapid growth over the next decade. In 2024, the value of this vibrant and disruptive retail segment was estimated at USD 125 Bn. It is likely to touch USD 345 Bn by 2030-end.
Increasing Internet penetration, smartphone adoption, digital payment infrastructure, and a young, tech-savvy population are driving this growth. Government initiatives like 'Digital India' and rapid improvements in the country's logistics and supply chain networks have further boosted its growth prospects.
Anuj Kejriwal, CEO & MD at ANAROCK Retail, said, "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 per cent in FY2024 from 46 per cent in FY2020 and is expected to reach 64 per cent by FY2030."
"Meanwhile, the Indian retail industry's market size is expected to touch USD 2,500 Bn by 2035, witnessing a three-fold increase compared to 2019. The report states that this growth is powered by rising disposable incomes, increasing urbanisation, a young and tech-savvy population, and an ever-expanding middle class. Today, the industry is defined by sprawling malls and thriving e-commerce alongside traditional bazaars."
"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.," added Anuj.
Moreover, he said, "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 per cent of demand, remaining the top footfall drivers. Also, post-COVID, the mall vacancy rate has declined from 15.4 per cent in 2019 to 8.1 per cent in 2024."
The report highlights that major domestic and international retailers have ambitious plans to increase their footprint in India's smaller towns and cities, resulting in a surging supply of malls in tier 2 and 3 markets, potentially accounting for over 26 million sq. ft. of mall spaces by 2030.
