NEW DELHI: India’s consumption economy will be the third-largest globally by 2030, and it would scale to about $5 trillion, said Kalyan Krishnamurthy, chief executive officer at e-commerce giant Flipkart Group. He expects that 75 per cent of this consumption will be led by the middle-income segment.
“The estimated size of the retail commerce economy in India will be more than $1 trillion in the next 3-4 years,” said Krishnamurthy, at Resurgence TiEcon Delhi - NCR event, report agencies.In this context, Krishnamurthy said India’s e-commerce journey has democratized shopping. In 2006, less than 3 per cent of people were shopping online. In 2019, about half of the population (about 500 million) was online and more than 10 per cent were shopping online. He said now close to 100 per cent pin codes in the country has seen the adoption of e-commerce. This includes categories like fashion, appliances and furniture. Flipkart is witnessing more than 60 per cent of transactions and orders in India are coming from small cities and towns.
“We still believe that we are scratching the surface when it comes to e-commerce penetration and adoption in India,” said Krishnamurthy, whose company competes with players such as US retail giant Amazon and Reliance’s JioMart.
He mentioned that only 3.5 per cent of Indian commerce is online as compared to more than 25 per cent e-commerce adoption in China, and other developed economies that have witnessed 10 per cent to 25 per cent adoption rates.
This growth will be driven by many technology and demographic trends. This includes India being home to a billion internet users by 2030. The prices of mobile data have fallen drastically by about 95 per cent in the last 5 years. About 75 per cent of India’s population in the next five to six years will comprise of millennials and Gen Z.
“We are (also) very clear that voice and vernacular technologies will enable digital access in India, in an accelerated fashion,” said Krishnamurthy.
The coronavirus pandemic has accelerated the adoption of e-commerce in many countries across the world including the US, China and the UK He is seeing a deceleration in the traditional retail economy of China, and the acceleration of e-commerce first companies. Big brands such as Nike, Adidas and Lululemon have seen a massive surge in terms of e-commerce.India has actually seen a very similar trend.