India e-tailing market reached $60 bn in GMV in FY23

NEW DELHI — The e-tailing market in India reached $60 billion in gross merchandise value (GMV) in FY23, a 22 per cent steady growth, a report showed on Friday.

With 210 million annual shoppers, ads monetisation contributed $1.2 billion in revenue for Indian e-tailers in FY23, growing at 37 per cent year-on-year, according to Redseer Strategy Consultants.

“Despite losing momentum, e-tailing today is 2.5 times of pre-Covid levels and is performing much better than overall retail consumption, which has been tepid in the recent quarters due to inflation concerns,” said Mrigank Gutgutia, a partner at Redseer.

E-tailing in India is gaining popularity with the increased proliferation of smartphones and the internet.

Direct-2-consumer brand growth has also spurred traditional players to take the digital route offering a competitive shopping experience and encouraging consumers to shop online.

Monthly shopper base (MTU) which stood at 65 million in FY23 is now 31 per cent of the annual e-tailing shopper base — the same metric which was just 23 per cent in pre-pandemic era.

“This goes to show that e-tailing user base is maturing and customers now shop online more frequently across a range of categories,” the report noted.

“Strategic partnerships of e-commerce platforms with global and Indian brands along with a change in shopper mix and an increasing share of women shoppers has resulted in an explosion of fashion sales,” Gutgutia said.

With 1.2 times better take rates, the revenue from product sales across India e-tailing has grown 3 times from $2 billion in FY19 to $6 billion in FY23.

“Ad revenue is growing significantly faster than the overall digital ads market reaching a 15 per cent share of the digital ads market in FY23,” the report mentioned.

“Flipkart Group has been resilient in terms of market share in the last few years (48 per cent in FY23) despite growing competition — and is especially growing much faster than industry in recent quarters,” the report added.