Mass consumers with an average annual income ranging from ₹2.5 lakh to ₹10 lakh are driving e-commerce adoption in India and may drive more than $135 billion in gross merchandise value (GMV) of the $300 billion in total e-commerce opportunity in India by 2030, according to a report by Redseer.

The survey was conducted across Metros, Tier 1, and Tier 2+ cities, with the target groups involving Gen-Z, millennials, and Gen-X shoppers. The ‘affluent’ consumers on the survey are a cohort with an average annual income greater than ₹10 lakh. The ‘mass’ consumers make between ₹2.5-10 lakh annually, while the ‘strivers’ are a third cohort who earn less than ₹2.5 lakh a year.

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As of 2022, India has 65–70 million households transacting on e-commerce platforms monthly, which is projected to go up to 120-130 million by 2030, with mass consumers contributing more than 80 per cent of the incrementally transacting households. 

Demographic breakdown

Breaking down the cohort by demographics, the report found that 75 per cent of the mass consumers were comprised of millennials and Gen-Z consumers. While Gen-Z, who are young and independent, show purchase preference for apparel, BPC, and electronics, value-driven independent millennials tilt towards BPC, food & grocery, and apparel. Gen-X constituted about 13 per cent and spent a higher share on food and groceries, followed by health and wellness. Although Gen-Z consumers have distinct characteristics from older generations, they are also value-conscious at their core, the report adds.

Moreover, the country’s retail market would play out differently across these consumer cohorts in the coming decade, with mass consumers expected to lead spending on the Indian retail market.

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As of 2022, mass consumers constitute 53 per cent of the Indian retail market, valued at $ 950 billion. This share is expected to grow at a CAGR of 12 per cent to touch 65 per cent by 2030, making it a $1.3 trillion opportunity for brands and businesses. The remainder of the projected $2 trillion retail market value is expected to be occupied by strivers and affluent consumers, growing at a CAGR of 8 per cent and 5 per cent, respectively.

Decision makers, major players

The top three decision drivers while making purchases included prices, deals, and discounts on e-commerce platforms, quality of products, and trust in the platform. Further, the survey indicated that more than 60 per cent of mass consumers were open to purchasing unbranded products if they liked the quality, while 30 per cent of mass consumers preferred unbranded over branded products.

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Within the $15–20 billion mass e-commerce segment (in 2022), 60–70 per cent of the sales were led by large horizontals. The rest (30–40 per cent) were led by players who had a specific focus on solving for and expanding the mass consumer segment, such as Meesho (which grew by focusing on better regional and local selection and pricing), along with vertical platforms like Purplle (BPC category), and the longer tail of smaller verticals and horizontals.

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