India e-commerce to grow 27 per cent; Reliance to capture half of online grocery sales: Goldman

According to a report titled ‘Global Internet: e-commerce’s steepening curve’ published by Goldman Sachs, India’s e-commerce business is expected to grow at a compound annual growth rate (CAGR) of 27 per cent to reach US$ 99 billion by 2024. It is projected that Reliance Industries would capture half of the online grocery sales through its Facebook.

The COVID-19 pandemic crisis has helped in doubling the penetration of e-commerce globally with categories such as consumer packaged goods driving as much as three years of penetration growth in three months.

It said, “We forecast India e-commerce will reach US$ 99 billion by 2024, growing at a 27 per cent CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth in our view.”

Online penetration of retail is expected to reach 10.7 per cent by 2024, versus 4.7 per cent in 2019.

“The biggest near-term theme in India internet, in our view, is the foray of Reliance Industries (India’s largest market-cap company with presence across sectors such as energy, telecom, and retail) into e-commerce, and the company’s tie-up with WhatsApp for online grocery,” it said.

In April 2020, Facebook acquired around 9.99 per cent stake in Jio Platforms, the subsidiary of RIL which is the country’s youngest but biggest telecom company as well as has an array of apps in its portfolio. JioMart, RIL’s e-commerce venture, plans to use Facebook’s WhatsApp to connect local grocery stores with customers.

In 2019, more than 80 per cent of the market in online grocery was captured by Bigbasket and Grofers, said Goldman Sachs.

Due to the outbreak of COVID-19, the shift to online is estimated to increase to 81 per cent CAGR during 2019-24 from around 50 per cent year-on-year growth the sector has been witnessing for the last couple of years.

E-commerce is one of the other countless technologies and consumer behaviors that has seen acceleration because of the coronavirus pandemic, said Goldman Sachs.

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