New Delhi: India’s e-retail market closed 2025 on a strong note, with gross merchandise value (GMV) reaching approximately $65–66 billion, marking a 19–21% year-on-year growth, according to the latest How India Shops Online 2026 report by Bain & Company in collaboration with Flipkart.
The report highlights a resurgence in consumption, driven by improved macroeconomic conditions, including GST cuts, income tax relief, easing inflation and lower lending rates. Private consumption growth rose to 10.5% in 2025, accelerating e-retail momentum, particularly in the second half of the year. The sector is expected to sustain this trajectory, with projections indicating 20%+ annual growth and a market size of $170–180 billion by 2030, capturing nearly one in ten retail dollars.
India’s online shopper base has doubled over the past five years to reach 290–300 million users in 2025, supported by a threefold expansion in the seller ecosystem and deeper penetration into non-metro markets. Tier 2+ cities contributed nearly 50% of incremental orders, underscoring the growing importance of smaller towns in driving e-commerce adoption.
Gen Z has emerged as a key growth driver, accounting for 40–45% of e-retail shoppers and contributing nearly half of incremental orders. This cohort is shaping consumption trends through influencer-led discovery, immersive content formats and increased adoption of instant credit.
Shyam Unnikrishnan, Managing Partner at Bain & Company said, “Five years ago, India’s e-retail story was about potential; today, it is a reality. GMV has more than doubled, the annual active shopper base has reached nearly 300 million, and the seller ecosystem has tripled, with growth increasingly led by Tier 2+ towns and Gen Z. This expansion is driven by real improvements in what e-retail offers customers; better value, wider assortment, deeper and faster access, and smarter discovery. The runway ahead is equally compelling, with two in three social and chat users yet to shop online. As India’s GDP per capita approaches the $4,000 inflection point, where discretionary spending has historically accelerated in other emerging markets, this will provide further tailwinds for e-retail. The next five years will certainly unlock the next wave of growth in India’s e-retail market.”
Despite rapid growth, e-retail penetration in India remains relatively low at around 1.6% of GDP, compared to significantly higher levels in markets such as China and Indonesia, indicating substantial headroom for expansion. A large untapped user base remains, with only about 30% of internet users currently shopping online.
Quick commerce (q-commerce) has emerged as a major growth engine, doubling annually over the past two years to reach $10–11 billion in GMV in 2025. The segment is projected to scale to $65–70 billion by 2030, contributing nearly half of incremental e-retail growth.
Manan Bhasin, Partner at Bain & Company, said, “Quick commerce plays a dual role—as a convenience channel for household essentials and a fulfillment channel for discretionary categories. Shopping behavior in quick commerce is distinct; high-intent shopping missions drive a higher incidence of search, faster checkout velocity, and conversions. Sessions last less than five minutes, half the duration of traditional e-commerce journeys. Brands have a short window to win and must strategically invest to own the front screen through targeted marketing. Winning brands also understand micro-markets to inform assortment and pricing decisions.”
The report also underscores the rising importance of conversational commerce powered by generative AI, which is expected to redefine how consumers shop online. India has emerged as one of the largest markets for AI-driven interfaces, with rapid adoption of large language models and chat-based platforms.
Balaji Thiagarajan, Chief Product and Technology Officer at Flipkart, added, “Scaling digital commerce across India’s unique demographics is a precision game, not just a volume game. This is why Flipkart’s conversational engine is built specifically for the Indian context by Indians, for Indians. By layering GenAI, we are ensuring a vernacular conversation for a customer in Muzaffarpur feels as effortless as a customer conversant in English purchasing a product in a metro. This creates a truly personal, assisted journey for the next hundred million Indians. The shift from ‘search and browse’ to ‘describe and get’ is the most significant change in how Indians will shop over the next five years. India is already the world’s second-largest ChatGPT market. That is not a coincidence; Indian consumers are highly receptive to conversational interfaces that work in their language and understand their context.”
High-frequency categories such as grocery, beauty and general merchandise continue to drive engagement, contributing over 75% of incremental GMV growth between 2020 and 2025. Meanwhile, innovations in affordability, discovery and fulfilment—including instant credit, vernacular interfaces and AI-led recommendations—are further accelerating adoption.
As the e-retail ecosystem evolves, platforms are expected to retain their competitive edge through strengths in brand trust, fulfilment capabilities, loyalty programmes and data-driven personalisation, even as conversational commerce and AI reshape the future of digital shopping in India.
