Over the next five-year period, India’s e-commerce growth will likely be driven by Bharat, or users from outside large metro and tier I cities. As per a study by Bain & Company, done in collaboration with online retail giant Flipkart, India’s online shoppers will grow to 300-350 million by 2025 from around 100 million currently.  It also will set the industry size at $100 billion in terms of gross merchandise value (GMV) during the same period.

Most of the 200 million new shoppers will come from tier 2 and small towns, who will turbocharge the online retail industry, which already sees three out of five online orders being shipped to cities and towns outside metro and tier 1 locations.

India's e-commerce market, which forms just 3.4 per cent of the country's $850 billion retail market, is at an inflection point, according to the report. This will be driven by a major drop in internet data rates, increasing share of Millenials and Gen Z among the population and high online reach of categories such as mobile phones and electronics.

Similar trends played out in the United States and China before e-commerce took off there, it said, and are expected to repeat in India.

"We believe voice, vernacular and video are going to be extremely critical as we cater to the next 200 million shoppers that come online," said Shyam Unnikrishnan, Partner at Bain & Company.

Kalyan Krishnamurthy, chief executive of Flipkart Group, told ET in a recent interview that around 50-60 per cent of new users who come into the consumer internet funnel each year in India make their first transaction through a video platform.

While the Covid-19 pandemic provided a massive boost to online shopping across the globe, in India sales fell as online retail firms were restricted from shipping non-essential products. However, positive trends in terms of existing shoppers increasing online spends and new shoppers coming online have been seen.

According to the report, out of 100 existing online shoppers, 30 per cent increased their spending in categories they had already shopped for during the pandemic.

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