Growth Projections in Digital Commerce in India
The McKinsey & Company study projects that the value of digital commerce in India will increase from $60-70 billion in 2022 to $320-340 billion by 2030, primarily driven by the Open Network for Digital Commerce (ONDC), a government-sponsored platform launched in 2022.
Sector-wise Projections
- Fashion and Lifestyle: Projected growth from $11-13 billion in 2022 to $80-82 billion in 2030.
- Electronics and Durables: Expected to triple from $24-26 billion in 2022 to $70-72 billion in 2030.
- Entertainment (including gaming, OTT services, film, and TV): Projected to grow six times to $17-19 billion.
- Hospitality: Digital consumption expected to grow two-and-a-half times by 2030.
Factors Driving Growth
- The number of smartphones in India surpassed 1 billion in 2024.
- Internet users will likely exceed 900 million by 2025.
- Digitally-connected consumers constitute 40% of global internet transactions.
- India has attracted global businesses, with 984 international companies registering between 2021 and 2023, up from 320 in 2019-2021.
- More than 1,500 global capability centers, with 250 added recently.
Economic Insights
- India, with 1.4 billion residents, has become the world's most populous nation.
- Average spending power increased from $271 in 2012 to $705 in 2023.
- Lack of financial assets: 95% of consumers have less than $2,000, limiting access to expensive products.
- Pro-business climate, low labor costs, and one-third of the world’s STEM graduates contribute to economic potential.
- Challenges include long-term payoffs and reliance on government spending in recent years.