Indian e-commerce industry set to grow by 141% through 2025: GlobalData

THE Indian e-commerce industry is set to grow by 141 per cent through 2025, from US$46.2 billion in 2020 to US$111.4 billion in 2025, said GlobalData on Tuesday.

Suresh Sunkara, retail analyst at GlobalData, said: "The retail industry is the second-largest employer in India. Small and medium-sized firms alone employ about 400-450 million people. However, the heightened inflation rate along with an equally high unemployment rate is weakening the consumer sentiment and affecting their purchasing power.

"On the other hand, the liquidity in the retail businesses is driven by seasonal sales and collections. However, high fixed expenditures and the absence of seasonal inflow of cash are threatening the existence of retailers."

According to GlobalData's Q1 survey of 500 Indian consumers, which was conducted in February this year, 84 per cent of respondents are still extremely/quite concerned about the impact of Covid-19.

Indeed, the combined impact of Covid-19 and inflation have pushed some retailers to resort to salary cuts to trim expenses.

"In addition, with customers fearing contracting the airborne virus, retail stores and malls continue to witness a precarious drop in physical fall. Hence, more retailers are contemplating layoffs and downsizing," said Mr Sunkara.

"Nevertheless, the long-term outlook for the Indian retail industry looks optimistic, supported by rising income, favourable demographics, the entry of foreign players and increasing urbanisation. Meanwhile, Indian retailers should look up to their peers in China, Singapore and South Korea to chart a quick road to recovery."