Walmart India CEO expects share of e-commerce in retail pie to rise six-fold to 12% by 2029

The share of e-commerce in the retail industry is expected to grow six times to 12 percent over the next 10 years, said Krish Iyer, President & CEO, Walmart India, who is also Chairman of India Food Forum. At present, e-commerce commands a two percent share.

“Despite the growth in brick and mortar or physical retail, e-commerce will grow to 12 percent from two percent over the next 10 years helped by a pick-up in omni-channel format," Iyer said, addressing the India Food Forum 2019 event held in Mumbai on February 5.

He said the gap between the two channels needs to be bridged as the consumer is going digital in terms of experience.

In terms of consumption, he said India is at the forefront globally and the macro-economic environment is having a profound impact on consumption.

Iyer said India’s GDP growth is expected to touch $6.3 trillion over the next 10 years, a compounded annual growth rate of nine percent, adding that India is already witnessing significant momentum in terms of GDP growth, which will aid consumption growth.

“The second key aspect is the growing middle class, which matters the most for India and will become the largest segment. Around 40 percent of total consumption by 2027 from the current 27 percent will be from the middle class,” Iyer said.

There is a need to enrich customer experience, which will in turn help e-commerce to grow, he explained, illustrating: “The consumer started buying Rs 180 over omni-channel instead of buying Rs 100 from the store itself. Later, the ratio in the store was Rs 70 and digital Rs 110.”

Tier II and III consumption also matters for the industry. Iyer said, “We believe in strength and growth of rural and Tier II towns. The rate of consumption in these towns is expected to rise to 45 percent from 36 percent at present,” he added.

Iyer sounded optimistic on rural growth as he sees healthy growth emanating from rural areas and envisages growth to get better going forward with greater level of urbanisation.

Concluding his speech, Iyer said there is a need to adopt technology, which is a key to retail growth. Lastly, he enumerated four key challenges led by food security, safety and nutrition, food wastage and sustainability.