India’s e-commerce industry is on track to reach $550 billion by 2035, propelled by increasing digital penetration and evolving shopping habits, as per a joint report by ANAROCK and ETRetail. Currently valued at $125 billion in 2024, the sector is forecasted to expand to $345 billion by 2030, maintaining an annual growth rate of 15%. A major contributor to this surge is the rising demand from Tier II and III cities, where the proportion of online shoppers climbed from 46% in FY20 to 56% in FY24 and is projected to hit 64% by FY30. To capitalize on this trend, e-commerce companies are strengthening logistics and delivery networks in these regions, ensuring efficient service beyond urban centers. Meanwhile, India’s overall retail industry is expected to triple from its 2019 levels, reaching $2.50 trillion by 2035.
Despite the dominance of e-commerce, physical retail remains strong, with shopping mall vacancy rates dropping from 15.4% in 2019 to 8.1% in 2024. In India’s top seven cities, new mall supply in 2024 stood at one million square feet, while leasing activity surged to six million square feet, underscoring robust demand. Experiential retail, particularly in fashion and food & beverage, plays a crucial role in driving foot traffic, accounting for nearly 45% of overall demand. Both domestic and international brands are expanding aggressively into Tier II and III markets, with over 26 million square feet of new retail space anticipated by 2030. The share of organized retail is set to rise from 12% to 17% by 2035, highlighting a shift toward a seamlessly integrated retail ecosystem that merges online and offline shopping experiences to cater to India’s growing consumer base.
