The e-commerce landscape in India is experiencing exponential growth, driven by increased internet penetration, smartphone usage, and digital payment adoption. In 2024, the market reached Rs 12.2 trillion ($147.3 billion) with a projected CAGR of 18.7 percent through 2028. The festive season of 2024 saw a 12 percent year-on-year increase in GMV to $14 billion, with Tier II and Tier III cities contributing over 60 percent of transactions.
Technological advancements such as AI-powered personalization and quick commerce services have gained prominence, while sustainability has emerged as a key differentiator. Digital payments also surged by 23.8 percent, reflecting growing trust in online platforms. Tier II and Tier III cities are becoming significant contributors to the e-commerce market, accounting for over 50 percent of online shoppers in India.
Enhanced logistics infrastructure, including expanded warehousing capacities and regional fulfillment centers, ensures faster deliveries even in remote locations. AI-powered route optimization and real-time tracking systems have streamlined operations and reduced delivery times. Direct-to-Consumer (D2C) brands are revolutionizing the e-commerce landscape, leveraging their websites, apps, and social media to establish direct connections with customers.
The Indian D2C market is poised to grow at a CAGR of 40 percent, aiming to reach $60 billion by 2027.
Key e-commerce shifts for 2025
D2C brands are capitalizing on personalized shopping experiences, omnichannel strategies, and innovative digital marketing to appeal to tech-savvy millennials and Gen Z.
The Indian e-commerce market is expected to surpass $145 billion in 2025, driven by technological advancements and changing consumer behaviors. Mobile commerce will lead the way, with advanced technologies like AI, ML, AR, and VR delivering hyper-personalized shopping experiences. The rollout of 5G technology will enhance real-time interactions, faster page loads, and seamless live shopping experiences.
Social media platforms are evolving into powerful e-commerce hubs, with features like live-stream shopping and shoppable posts driving sales among younger audiences. Quick commerce, focusing on rapid delivery of essentials, is also expected to expand as businesses optimize logistics to meet the growing demand for speed and convenience. The convergence of technological advancements, evolving consumer behaviors, and strategic market expansions is set to redefine India’s e-commerce landscape in the coming years.
Projections indicate a surge toward a $2 trillion market, driven by increasing disposable incomes, Gen Z influence, and the seamless integration of technology into retail experiences. D2C brands are leading this evolution, showing significant growth potential. Stakeholders adaptable to these dynamic shifts will have the opportunity to capitalize on the immense growth potential ahead.
