India’s e-commerce penetration will double to 11% by 2024: Goldman Sachs
Highlights:
- Online grocery orders to grow from 300,000 per day in 2019, to more than 5 million per day by 2024.
- Amazon has committed an additional $1 billion investment for India while Walmart said it will invest $1.2 billion in Flipkart.
- The recent entry of RIL, we believe growth will accelerate to 81% annual growth rate for the period of 2019-2024.
All eyes are on the Indian online retail industry, which is set to be worth $99 billion by 2024, according to a Goldman Sachs report.
The COVID-19 pandemic crisis has helped in doubling of penetration of e-commerce globally with categories such as consumer packaged goods driving as much as three years of penetration growth in three months.
The report also said that online penetration of retail is expected to reach 10.7% by 2024, versus 4.7% in 2019.
The growth rate for the industry in India, for each of the next four years, would surpass the same of established economies like the US, China, the UK, Europe and Brazil, according to Goldman Sachs’s review of e-commerce markets globally.
E-commerce is expected to register a growth of over 18% for the current year but estimates for 2021 and 2022 show a year-on-year growth rate of over 33% and 28% respectively. To compare, growth rates for the same period for the US are 17% and 19%, while it is nearly 11% for China in the next two years.
This is further seen in the bullishness shown by both Amazon India and Walmart here. Amazon has committed an additional $1 billion investment for India while Walmart said it will invest $1.2 billion in Flipkart.
“The category has been growing at more than 50% year-on-year for the last couple of years, but with the outbreak of Covid-19 resulting in a shift to online, and the recent entry of RIL, we believe growth will accelerate to 81% annual growth rate for the period of 2019-2024,” analysts at Goldman Sachs said.
