In New Delhi, on April 9, India's online retail market reached a new high, with gross merchandise value (GMV) reaching nearly USD 65-66 billion, representing a 19-21% increase in value terms. This growth was reported in a Bain & Company report, in collaboration with Flipkart.
The report, titled "How India Shops Online 2026," projects India's e-retail market to reach USD 170-180 billion by 2030, with sustained annual growth of 20% or more, driven by increasing consumer engagement and spending.
The report highlights that India is a global leader in quick commerce, with 16-17% of e-commerce GMV flowing through this sector, significantly ahead of other markets, including China.
Over the past two years, the quick commerce segment has doubled, reaching USD 10-11 billion in GMV (or total sales value) in 2025.
Looking ahead, it is expected to reach USD 65-70 billion by 2030 and contribute 45-50% of incremental e-retail GMV, with traditional e-retail maintaining a 60-65% share by 2030.
The report also notes that overall growth is being supported by improving economic conditions and consumer sentiment.
Private consumption growth increased from 8% (2022-24) to 10.5% in 2025, driven by GST cuts, income tax relief, reduced inflation, and lower lending rates.
"This momentum has driven second-half growth of 22-24% and an estimated 23-25% growth in Q1 2026, reflecting a broader revival in consumption and discretionary spending," the report states.
According to the report, India is emerging as a critical global consumption engine, poised to capture 1 in 8 incremental consumption dollars over the next five years.
While India's e-retail market experienced healthy growth in the previous year, the broader retail sector's trajectory towards USD 1.6 trillion by 2030 underscores the continued importance of offline infrastructure in reaching the majority of Indian consumers.
India's online shopping market has more than doubled in the last five years, with the shopper base doubling to 290-300 million shoppers in 2025, supported by rapid expansion of the seller ecosystem and deeper geographic penetration.
"Gen Z has emerged as a critical cohort, accounting for 40-45% of e-retail shoppers, contributing 50% of incremental e-retail orders in 2025, with 2.5 times faster spending per shopper growth compared to other cohorts in metropolitan areas," the report observes.
This generation of customers demonstrates distinct shopping preferences across categories like lifestyle, beauty, and electronics, such as influencer-led trend discovery on social media, immersive videos/feeds, and the use of instant credit.
Growth is increasingly well-diversified geographically, with Tier II and above cities contributing about 50% of incremental online orders in 2025, despite a shopper penetration of just 25-30% of internet users (compared to 45-50% in metros/Tier 1).
Shyam Unnikrishnan, Managing Partner at Bain & Company, said, "As India's GDP per capita approaches the USD 4,000 inflection point, where discretionary spending has historically accelerated in other emerging markets, this will provide further tailwinds for e-retail."
Unnikrishnan stated that the next five years will undoubtedly unlock the next wave of growth in India's e-retail market.
Despite the strong expansion, India's e-retail penetration remains structurally low at about 1.6% of GDP, compared to other parts of the world – 13-14% in China and 4-4.5% in Indonesia – indicating a substantial long-term runway for growth.
The majority of the next 500 million shoppers are already in the digital funnel, with only 30% of internet users shopping online (compared to 92% in China and 74% in the US), the report notes, adding "a large untapped base remains."
Q-commerce has given a significant boost to the e-retail story, with structural advantages like high population density, low manpower and real estate costs, as well as low online grocery penetration acting as key enablers.
The q-commerce space is accelerating online grocery adoption, with e-grocery penetration growing about 5 times since its launch and now accounting for nearly 1.5% of the overall grocery market.
"Q-commerce with a dual role of a convenience channel for household essentials (85-90% of GMV) and a fulfillment channel for discretionary categories (use speed as a customer delight) now operates over 7,000 micro-fulfillment centers across 200+ cities, with two-thirds of new capacity added in the top 10 cities," the report states, documenting the rapid scale-up.
Operating scale has materially improved profitability; however, customer adoption and sustainable unit economics remain unproven beyond top metros and Tier 1 cities, the report further states.
Vijay Iyer, VP and GM, Flipkart Ads, said: "The next era of commerce isn't about teaching users how to search; it's about replacing traditional category navigation with fluid, intent-driven conversations."
Through the amalgamation of GenAI and fit-for-purpose technology, digital commerce will soon feel less like an interface and more like a natural dialogue for every Indian.
"Commerce in India is evolving fast. Shoppers today arrive knowing what they want, with shorter sessions and higher intent, especially on quick commerce," Iyer said.
