India’s e-tailing sector
The E-tailing market in India recorded a gross merchandise value (GMV) of $60 billion in the fiscal year 2022-2023, representing a steady growth of 22 percent. The report also highlighted that ads monetization contributed $1.2 billion in revenue for Indian e-tailers during the same period, growing at a rate of 37 percent year-on-year.
Despite some loss of momentum, the e-tailing market in India is still 2.5 times larger than pre-Covid levels and outperforming overall retail consumption, which has been sluggish due to concerns about inflation. The increasing adoption of smartphones and the internet has fueled the popularity of e-tailing in India. Additionally, traditional players in the retail sector have also embraced the digital route, leveraging direct-to-consumer brands to provide competitive shopping experiences and encourage online shopping.
The monthly shopper base (MTU) in FY23 reached 65 million, accounting for 31 percent of the annual e-tailing shopper base. This metric stood at just 23 percent before the pandemic, indicating that the e-tailing user base is maturing, and customers are shopping online more frequently across various categories.
The report also highlighted that strategic partnerships between e-commerce platforms and global and Indian brands, as well as an increasing number of women shoppers, have led to a surge in fashion sales. The revenue from product sales in India’s e-tailing sector has grown threefold, from $2 billion in FY19 to $6 billion in FY23, with 1.2 times better take rates.
Furthermore, the report noted that ad revenue is growing at a faster pace than the overall digital ads market, reaching a 15 percent share of the digital ads market in FY23. Despite increasing competition, the Flipkart Group has maintained a resilient market share of 48 percent in FY23, growing faster than the industry in recent quarters.
