Digital marketplaces likely to hit GMV of $350 billion by 2027: Report

India’s online marketplaces are expected to record a combined gross merchandise value (GMV) of over $350 billion by 2027, according to a report published by Bain & Company and Accel.

Large offline markets, over $2 trillion of consumption expenditure, rising disposable incomes driven by middle-class expansion, and an increasingly digitised base of online shoppers are likely to contribute majorly to India’s growth story in the next five years.

Marketplaces are slated to create $400 billion to $500 billion in enterprise value, reach 400 million to 450 million online shoppers, enable more than 15 million MSMEs to grow their businesses online, and create seven million jobs by 2027.

The report also mentioned upstream B2B, fintech, and shipping and logistics as some of the areas that pose significant headroom for growth for existing as well as emergence of new marketplaces. Additionally, it said the next wave of scale marketplaces could emerge in two major categories, those focused on smaller towns and cities and those engaged in cross-border activity.

Digital marketplaces in India today contribute more than $100 billion in GMV, delivering heightened convenience and choices to over 200 million shoppers; and offering logistical and financial support to more than 6 million micro, small, and medium enterprises (MSMEs), the report titled 'The Rise of Digital Bazaars in India' stated.

Moreover, marketplaces have enabled consolidating fragmented demand and supply, eliminating intermediaries, and offering pan-India reach to businesses. The overall economy has also benefitted immensely, as marketplaces have improved financial inclusion by providing traditionally underbanked segments with greater access to capital.

This has allowed India to cultivate a vibrant and successful marketplace landscape and as of today, around 20 marketplaces have achieved more than $1 billion in GMV, and many players have turned profitable, the report mentioned.

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In 2021, funding touched $16 billion - growing four times compared to 2018, more than 135 companies raised funding, and a slew of marketplace IPOs such as Nykaa, Zomato, and Policybazaar were seen.

As per the report, categories such as gaming, caregiver services, real estate reservations, creative content, and Web 3.0 are potential white spaces in India for marketplaces to emerge in.