E-commerce adoption soars in India's smaller cities, to reach 65% share by 2030: Anarock report
India is also witnessing retail expansion and a surge in consumer demand. Consequently, the new mall supply has also increased, particularly in Tier-1 over the next two years.
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India's e-commerce business has witnessed a significant boost in the country's Tier-2 and Tier-3 cities, outpacing the Tier-1, according to a report. With the rise in disposable income and deeper smartphone and internet penetration, the e-commerce adoption in Tier-2 and 3 has outpaced Tier-1 cities. A report by Anarock property consultants has estimated the share of the overall online shopping pie at 65% in India's smaller cities by 2030 compared to 36% in Tier 1 cities. Until FY2024, the share of online shoppers in Tier-1 cities was higher than the other cities.
"The number of Indian online shoppers has jumped from 140 million in 2020 to nearly 260 million in 2024; it is projected to nearly double to 300 million by 2030, and to 700 million by 2035," the report mentioned.
Apart from the e-commerce boom, India is also witnessing retail expansion and a surge in consumer demand. Consequently, the new mall supply has also increased, particularly in Tier-1 over the next two years. The Anarock research estimated that over 16.6 million sq. ft. of new Grade A mall supply will enter the top 7 cities over 2025 and 2026. Hyderabad and Delhi-NCR will command the lion's share, with a combined 65% share, the research added.
While Anuj Kejriwal, CEO & MD- Anarock Retail, anticipated that the new supply to some extent could lead to potential oversupply, current absorption trends are reassuring.
"The previous three-year data trends show that new mall supply in the top 7 cities did not match the overall leasing. In 2022, these cities witnessed approx. 2.6 million sq. ft. of new Grade A retail supply, while leasing clocked in at approx. 3.2 million sq. ft. Likewise, 2023 saw 5.3 million sq. ft. of new Grade A mall supply, while 6.5 million sq. ft. were leased," Kejriwal said.
Anarock data pegs total mall leasing over the next two years at more than 12.6 million sq. ft. across the top 7 cities, driven by strong leasing and positive consumer sentiments.
"The strong leasing rate is also prompted by the entry of over 60 international retail brands in India over the last four years across categories like fashion, electronics, lifestyle, & F&B," Kejriwal added, "This has accelerated demand for high-grade organized retail spaces, particularly in high-footfall zones like malls and high streets."
