India’s Ever evolving Retail Landscape

The biggest aid for retail brands in optimizing online commerce channels is the data generated with each order and sale. The data generated by e-commerce and D2C brands also helps understand at a macro level how people shop online. 

E-commerce accounts for approximately 9-10% of total retail sales in India. This sector has been growing rapidly, with an annual growth rate of around 14-15%. Categories like electronics, fashion, and grocery have been key drivers. At the same time, The Quick commerce (ultra-fast deliveries) has also contributed significantly to the growth of e-commerce, particularly in urban centers.

The share of e-commerce is expected to increase gradually over the next few years, as internet penetration, digital payment adoption, and consumer preferences for convenience grow, particularly in Tier II and Tier III cities. However, physical retail will continue to dominate in India due to the strong presence of traditional markets and the diverse retail preferences across urban and rural populations.

Most data generated online cannot be directly applied to take actions and decisions in the offline retail space. The growing omnichannel trend across the global retail landscape is also witnessing the advent of location intelligence within retail tech. Small Indian cities, particularly Tier II and Tier III cities, are poised for significant retail growth by 2029, driven by increasing urbanization and rising disposable incomes. 

At the same time, Quick commerce—focused on rapid delivery of small orders—is growing at an annual rate of 73%, significantly higher than the 14% growth rate of conventional e-commerce. This rapid expansion highlights the increasing consumer demand for faster and more convenient delivery options, especially for everyday essentials, positioning quick commerce as a transformative force in India's evolving retail landscape.

India's quick commerce industry has experienced explosive growth, expanding by 280% from USD 0.5 billion in FY22to USD 3.3 billion in FY24. With only a 7% penetration rate, the sector remains largely untapped, offering tremendous expansion opportunities. 

Experts foresee quick commerce playing a pivotal role in shaping India's retail future, as it continues to outpace traditional e-commerce. This surge highlights a change in consumer behavior, with a growing preference for convenience and immediacy in shopping.

Retail brands in India are also adapting to these shifts by leveraging technology to enhance customer experiences. From embracing e-commerce platforms to integrating AI and data analytics for personalized offerings, the Indian retail sector is evolving rapidly to meet changing consumer preferences. This collective transformation marks a crucial era of retail expansion, where smaller cities play a pivotal role in driving growth across the country.