India's Online Retail to Quadruple to $260 billion by 2030, Led by Gen Z and Tier II/III Cities: FICCI-Deloitte Report

India’s online retail industry is on course for a massive expansion, with its market size projected to climb from USD 75 billion in 2024 to USD 260 billion by 2030, according to a new report by FICCI and Deloitte. The study suggests that e-commerce will double its share in overall retail sales—from 7% to 14%—fundamentally reshaping consumer habits.

The surge is being powered by rapid digitisation, affordable internet access, and a consumer base dominated by younger generations. Gen Z alone is expected to drive much of this transformation, contributing 43% of India’s consumption by 2025 with an estimated direct spending power of USD 250 billion. Their preferences are already defining key categories such as fashion, personal care, and footwear, where they are set to command nearly half the demand.

A striking trend highlighted in the report is the growing dominance of smaller cities. Tier II and III towns now account for more than 60% of all e-commerce transactions, thanks to cheaper smartphones, wider connectivity, and low-cost data services. By early 2025, India recorded 1.12 billion active mobile connections and more than 806 million internet users, underlining the scale of digital penetration.

Also Read: E-commerce & Policy Push to Drive India’s Express Logistics to $22 Bn by 2030: KPMG Report | Republic World

Quick commerce is emerging as a game-changer in this landscape. Expanding to over 80 cities—including Bhopal, Mangalore, and Thrissur—the sector is clocking annual growth rates of 70–80%, making it the fastest-growing market of its kind globally. Nearly one in ten online shoppers have already embraced this model, reflecting a strong appetite for instant delivery.

In terms of categories, groceries are expected to grow steadily at 8% annually through 2028, while fashion continues to rise on the back of premiumisation and fast-fashion trends among younger shoppers. Electronics, however, are set to witness the sharpest climb, with a projected CAGR of 14%, supported by higher incomes, urbanisation, and an expanding middle class.

The report also notes the demographic shifts underpinning these changes. India’s middle-income segment is growing at 6.3% annually and is expected to make up 60% of the population by 2047. This group’s increasing appetite for discretionary spending on fashion, beauty, and gadgets is providing a strong push for organised and digital retail.

Despite this momentum, traditional retail continues to dominate, holding a 93% market share in 2024. However, its grip is expected to ease to 86% by 2030 as digital channels gain more ground. Overall, India’s retail market—currently valued at USD 1.06 trillion—is forecast to reach nearly USD 1.93 trillion by the end of the decade, growing at 10% annually.