How will Indians shop online in 2023: Trends & predictions

how indians will shop
(Last Updated On: May 23, 2023)

It’s time for the Indian online shopping trends of 2023. Customer behaviour, purchase trends and the retail landscape have all come together to give us a sense of what the Indian shopper prefers when exploring e-retail brands.

Which category will see a high number of purchases? Which cities will contribute to the eCommerce growth? Are marketplaces still favourable? What is the average age of the Indian shopper? Lots of questions, and one blog with all the answers!

The growing eCommerce market

In 2021, 180–190 million Indians shopped online. By 2027, around 400–450 million shoppers will emerge in eCommerce. This is based on shoppers who are already in the digital funnel as social media users. 

India has strong fundamentals to support a large growth in eCommerce. A large consumer market, increasing smart phone penetration, and low shipment costs contribute to this. 

india ecommerce
Source: Bain & Co.

Top eCommerce categories 

According to a report by Bain, even though historically electronics ruled the e-retail market. In the next 5 years, this will change.

Fashion, personal care and grocery have shown the biggest potential for market penetration and growth. In fact, these can cumulatively account for 2/3ds of the e-retail market in 2027.

Fashion and low-price items made available online led to more shoppers trying out eCommerce—more than 40% of new shoppers bought fashion in their first online purchase.

How much of India is selling online? 

eCommerce is continuing to see massive growth. In the past year alone, there has been a 35% growth in online sellers. what’s more, 40% of this is from tier II or smaller cities.

The Indian government has also been cognizant of the rising benefits of going online. Their mission of democratizing online commerce has seen fast-paced growth with their creation of the Open Network for Digital Commerce (ONDC). With a recent pilot in 5 cities, the platform hopes to touch all major cities by the end of 2023.

This is been aided by the growing shoppers base as well. According to the same report by Bain, the percentage of daily active users has risen to 25% from 18% in 2019. Customers also spend more on eCommerce platforms.

Who will shop online?

Before 2015, most eCommerce consumers were from upper-income households based in metro and tier-1 cities. Now, three out of five shoppers belong to tier-2 and other rural areas. In the coming years, this number is set to increase. This is partly because of the advancement in delivering by shipping companies—top courier services  deliver to 26,000+ pin codes across India.    

Many online shoppers from tier-2 and tier-3 cities used voice and vernacular search in their shopping journey. There has been a 5x growth in voice-search users and 3x growth in vernacular-search users over the past year.

A new generation of digital natives are starting to emerge—one in three shoppers is Gen Z (younger than age 25) and will become a critical cohort in the future.

Business models

Online businesses are experimenting with different business models as their target audience grows. The aim is to address gaps in traditional commerce such as effective customer service and personalisation. Some popular alternative business models include social commerce, direct-to-consumer (D2C), video commerce, and quick commerce.

Social commerce is expected to grow approximately by 50% from 2021 to 2025. You’ll need to come up with a solid social media strategy for your brand, if you haven’t already. More consumers are becoming comfortable to purchase via social media. This means there are high chances that your target audience will spend more time on their favourite social platform with an intention to purchase. 

Video commerce is expected to grow in India by leaps and bounds as the user base for short-form video platforms (Instagram and Facebook) is expected to reach 600 million by 2025. Check out the latest video commerce trends here.

Stay ahead of the game

eCommerce is no longer a one-stream channel. Shoppers are exploring beyond online marketplaces and brands are coming up with creative ways to engage customers. By understanding eCommerce trends, you can better prepare your business for the future of eCommerce.

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