Flipkart CEO: Consumption Economy of India, by 2030 will globally be the Third-Largest
By: Ashwathy Nair
- The consumption economy of India would scale to about $5 trillion.
- It is expected that 75% of the consumption economy will be led by the middle-income segment.
- The e-commerce journey of India has democratized shopping.
By the year 2030, the consumption economy of India will globally be the third-largest and it would be scaling up to about $5 trillion, it was stated by the Chief Executive Officer at e-commerce giant Flipkart Group, Kalyan Krishnamurthy. He is expecting that the middle-income segment would be driving a 75 per cent of this consumption.
At Resurgence TiEcon Delhi – NCR event, Krishnamurthy stated that “In the next 3-4 years, the projected scale of India’s retail trade economy will be more than $1 trillion.”
It was stated by Krishnamurthy that the e-commerce journey of India has democratized shopping. In the year 2006, it was seen that less than 3 per cent of people were shopping online. In the year 2019, about 500 million, which is almost half of the population, was online and more than 10 per cent of people were shopping online. He stated that the adoption of e-commerce has now seen close to 100% of pin codes in the region. This involves categories such as fashion, furniture and appliances. It has been witnessed by Flipkart that more than 60 per cent of transactions and orders in India come from small cities and towns.
“We still believe that when it comes to e-commerce penetration and adoption in India, we are scratching the surface,” said Krishnamurthy, whose company is competing with players like the US retail giant Amazon and JioMart of Reliance.
It was mentioned that only 3.5 per cent of Indian trade is online, compared to more than 25 per cent of China’s e-commerce adoption, and other developing economies that have experienced 10 to 25 per cent adoption rates.
Many technology and demographic trends will drive this growth. By the year 2030, this involves India being home to a billion internet users. In the last five years, cell data rates have dropped significantly by about 95 per cent. Around 75 per cent of India’s population will consist of millennial and Gen Z in the next five to six years.
Krishnamurthy also stated that “in an accelerated fashion, it is clear about the voice and vernacular technologies, which will be enabling digital access in India.”
In several countries around the world, including the US, China and the UK, the coronavirus pandemic has intensified the acceptance of e-commerce, seeing a deceleration in China’s conventional retail economy, and the acceleration of first-time e-commerce enterprises. In terms of e-commerce, major brands like Nike, Adidas and Lululemon have seen a huge surge.
Krishnamurthy stated that it was expected that the e-commerce market size will be ranging from approximately $50 billion to $60 billion in the next 3-4 years. “The same numbers today are in fact close to $90 billion to $100 billion.”