Ecommerce retail market expected to cross $100B by 2024
The ecommerce retail market, which stood at $30 billion in 2019, is expected to cross the $100-billion mark by 2024, driven by an increasing set of suppliers selling online and change in buying behaviour of consumers, among others, according to a white paper released on Thursday.
The rise of online fresh groceries sales along with growing numbers of prepared food delivery companies entering this space could propel category growth by five times in the next five years, according to the paper jointly prepared by global professional services firm Alvarez & Marsal (A&M) India and CII Institute of Logistics.
According to the white paper, titled 'Enabling the next wave of ecommerce in India through supply chain innovation', some of the key evolving models for ecommerce include order to store for apparel; dark store for FMCG/grocery and meat/pharmaceuticals; store to customer deliveries for FMCG grocery and omnichannel presence for retailers.
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The Indian retail landscape has seen a momentous change over the past 10 years with the overall industry growing to $915 billion in 2019, it said. The paper added that ecommerce retail, which accounted for less than $1 billion in 2010, has grown to more than $30 billion in 2019.
It attributed the growth of ecommerce over the last decade to internet penetration, smartphone adoption, and category expansion. The paper also said categories like electronics have been led by the horizontal marketplaces, while penetration in groceries, furniture, pharmacy, and cosmetics have been led by specialists.
"Ecommerce retail (B2C) market to be more than a $100 billion opportunity by 2024," the white paper said adding that with just around 3 percent penetration of ecommerce in 2019, the market continues to ride its next wave of growth given the significant headroom available.
Ecommerce penetration in retail in mature markets like the US and China has reached around 15 percent and around 20 percent, respectively, by 2019; while in India, it could reach around 6 percent by 2024, it added.
"While the bulk of ecommerce volumes come from top-30 cities, over 60 percent of ecommerce volumes are likely to come from Tier-II and Tier-III cities in the next five years, It is an imperative for ecommerce businesses to build their seller base and delivery reach in smaller towns," said A&M India Managing Director Manish Saigal.
Operating models for ecommerce will evolve depending on various factors including customer requirements and changing buying behaviors and the availability of appropriate technology and logistics partners, the papaer said.
The next wave of anticipated online retail growth drivers for categories such as fast-moving consumer goods (FMCG), groceries and apparel will be through social media, chat engines and artificial intelligence bots, it added.