India is on the brink of a digital commerce revolution, with projections indicating that the sector will witness a fivefold growth by 2030, driven largely by the Open Network for Digital Commerce (ONDC), a government-backed initiative launched in 2022. According to a recent McKinsey & Company study, India’s digital commerce is set to surge to a remarkable ₹27,38,240 - ₹29,09,380 crore (US$ 320-340 billion) by 2030, up from ₹5,13,420 - ₹5,98,990 crore (US$ 60-70 billion) in 2022. This growth signals an exciting future for India’s economy, with increased accessibility and opportunities in online trade.

The Role of ONDC: A Catalyst for Growth

The Open Network for Digital Commerce (ONDC) has emerged as a critical enabler in this expansion. It is a platform designed to connect buyers and sellers online, offering a more inclusive, transparent, and accessible digital marketplace. ONDC’s potential to transform India’s digital commerce ecosystem is immense, and its reach is expected to grow exponentially in the coming years, particularly as more businesses and consumers embrace online transactions.

With the ONDC framework enabling smaller vendors and local businesses to seamlessly integrate into the digital commerce space, the platform is expected to significantly contribute to India’s share of global digital commerce.

Sector-Wise Growth Projections: Fashion, Electronics, and Groceries Lead the Way

According to McKinsey’s insights, various segments of digital commerce will experience robust growth by 2030, and certain categories are projected to dominate.

• Fashion and Lifestyle Commerce: This sector will see a massive surge, growing from ₹94,127 - ₹1,11,241 crore (US$ 11-13 billion) in 2022 to ₹6,84,560 - ₹7,01,674 crore (US$ 80-82 billion) by 2030. The expansion of fashion and lifestyle commerce will be driven by the growing affluence of consumers, the rise of e-commerce platforms, and increasing consumer awareness about the availability of diverse products.

• Electronics and Durables: The demand for electronics and durable goods will experience a threefold increase, from ₹2,05,368 - ₹2,22,482 crore (US$ 24-26 billion) in 2022 to ₹5,98,990 - ₹6,16,104 crore (US$ 70-72 billion) by 2030. Smartphones, consumer electronics, and appliances are expected to lead this growth due to rising consumer demand for technological advancements.

• Grocery Sector: The grocery market will see a staggering 11-fold increase, growing from ₹34,228 - ₹42,785 crore (US$ 4-5 billion) in 2022 to ₹4,27,850 - ₹4,70,635 crore (US$ 50-55 billion) by 2030. The adoption of online grocery shopping, coupled with the expansion of delivery platforms, will contribute to this remarkable growth.

These three sectors—fashion, electronics, and groceries—are expected to account for a combined 62% of total digital commerce in India by 2030.

Services, Food, and Entertainment: Growing Sectors

Along with these traditional sectors, other segments of digital commerce will also see considerable growth:

• Services (including online education, financial services, etc.): This category is projected to grow by five to six times, reaching ₹2,56,710 - ₹2,73,824 crore (US$ 30-32 billion) by 2030, driven by digital transformation in service sectors.

• Food and Beverages: The online food ordering market will continue to expand, tapping into India’s growing demand for convenience and variety, contributing to overall digital commerce growth.

• Entertainment and Gaming: The entertainment segment, which includes gaming and over-the-top (OTT) services, is expected to grow by six times, reaching ₹1,45,469 - ₹1,62,583 crore (US$ 17-19 billion) by 2030, driven by increasing internet penetration and evolving consumer preferences for on-demand content.

• Hospitality and Pharmaceuticals: Digital transactions in the hospitality and pharmaceuticals sectors are also expected to experience notable growth as India’s digital infrastructure and healthcare services evolve.

India’s Digital Economy: Fueling Growth

A vibrant digital economy is at the heart of this growth. India’s smartphone penetration surpassed one billion in 2024, and the number of internet users is expected to cross 900 million by 2025, making India one of the largest and fastest-growing digital markets in the world. Additionally, India’s population, now the most populous globally, and increasing consumer spending are expected to drive this growth further.

Per capita spending in India has increased significantly, from ₹23,188 (US$ 271) in 2012 to ₹60,324 (US$ 705) in 2023. This rise in disposable incomes is expected to foster greater participation in online commerce. However, while spending power is growing, the challenge remains that 95% of Indian consumers still have less than ₹1,71,132 (US$ 2,000) in financial assets, which limits their ability to purchase high-cost products. Overcoming this barrier will be key for the continued growth of premium and luxury product segments.

Challenges and Opportunities

Despite the growth opportunities, challenges persist in the form of long payback periods, especially for companies attempting to scale operations in new markets or digitize existing supply chains. Infrastructure limitations in certain regions, coupled with logistics challenges, also continue to hinder the rapid adoption of digital commerce across all sectors.

However, with supportive government initiatives, increasing internet connectivity, and the ongoing expansion of digital platforms, India is well-positioned to overcome these obstacles and establish itself as a global leader in digital commerce.

Conclusion: India’s Digital Commerce Future

The future of India’s digital commerce landscape looks exceedingly bright, with ONDC at the forefront of a transformation set to reach ₹27 lakh crore by 2030. Driven by increasing consumer demand, the rise of online shopping, and the expansion of digital services, India’s e-commerce market is poised for unprecedented growth. The sectors of fashion, electronics, and groceries are expected to lead this growth, while other segments like entertainment, food delivery, and services will add to the burgeoning digital economy.

India’s role in global digital commerce is set to grow rapidly, and with continued advancements in technology and infrastructure, digital commerce will remain one of the central pillars of the country’s economic future.

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