India’s shopping behaviour is changing at a pace few markets in the world can match. Nearly three out of four consumers now find products online, and e-commerce already drives 60% of transactions in Tier 2 and Tier 3 cities. The story is no longer just about convenience but how digital commerce is reshaping the economy.
A recent FICCI-Deloitte report highlights that aspirational, tech-first consumers now dominate India's consumer base. Gen Z alone has $250 billion in spending power, with online marketplaces now influencing 73% of purchase decisions.
Festive spending signals rising trust
Festive season spending offers a clear signal of this shift. A recent LocalCircles survey found that online festive shopping adoption among urban households has doubled over last year.
While quick commerce continues to grow for instant, low-ticket purchases, consumers are turning to e-commerce platforms for high-value and planned festive buying, citing transparent return and refund policies, convenience, and stronger consumer safeguards.
Trust plays a major role in this. Nearly 90% of households now identify quality assurance, transparent pricing, and reliable return policies as top factors in influencing their shopping decisions. Seventy nine percent of urban Indian households shopping for high-value products online want platforms to provide a reliable and efficient return and refund process. On this front, Amazon has emerged as the most preferred e-commerce platform, with almost 8 in 10 consumers placing it at the top, followed by BigBasket in quick commerce.
The takeaway is clear: e-commerce today is about more than just convenience; it's about building confidence and reliability into the shopping experience.
Platforms that prioritize consumer trust are not only emerging as top preference this festive season but also forging long-term, sustainable customer relationships.
A growth multiplier across sectors
E-commerce's multiplier effect is what gives it its power. It promotes expansion in related industries as well as in retail:
* Manufacturing: Integrated, agile supply chains and localized production are reshaping direct-to-consumer (D2C) brands. India is emerging as a global hub with steady increase in Ayurvedic personal care and packaged food exports. Platforms have committed to facilitating a total of $80 billion in e-commerce exports by 2030.
* Logistics: The demand for EV fleets, AI-led fulfillment, and micro-warehousing is rising with quick commerce. Green logistics is both a business opportunity as well as a sustainability story.
* Technology and Data: AI is playing a major role in retail. Customers' purchasing habits and business operations are changing as a result of predictive analytics, merchant agentic AI, and AR/VR-powered shopping experiences.
* Startups: Startups are elevating regional brands, AI-enabled appliances, clean-label cosmetics, and functional foods. They are also reaching markets traditional distribution struggled to penetrate, signalling the depth of this shift.
In effect, investments in consumer internet startups extend to supply chains, software-as-a-service (SaaS), fintech, and sustainability.
Signals for analysts and investors
Three trends stand out for market watchers:
1) M&A Traction: Well-known FMCG companies are acquiring digitally native brands (such as Marico with Beardo and HUL with Minimalist), validating startup valuations and exit strategies.
2) Growing Seller Diversity: Growth is not metro-centric as over half of India's 1.6 million online sellers come from Tier 2 and Tier 3 cities.
3) Sustainability Premium: As global ESG standards tighten, EV-enabled logistics and circular packaging are drawing more investor interest.
Together, these signals show why e-commerce is increasingly seen as a long-term play.
Premiumisation: The next consumer shift
Premiumisation is accelerating. Premium products already account for 42% of value growth and 27% of FMCG sales. E-commerce platforms have enabled this shift with increased accessibility of expensive, wellness and sustainability-focused products for customers worldwide. For startups, this means better margins in addition to scale. For investors, it shows that Indian consumer internet is moving up the value chain – an indicator of long-term profitability.
What lies ahead
Online retail in India will grow from $75 billion in 2024 to $260 billion by 2030, expanding its share from 7% to 14% of total retail. The way this digital engine propels manufacturing, exports, jobs, and sustainability is just as important as how customers shop.
For startups: this presents a chance to grow based on long-term changes rather than transient surges. For investors: it serves as a reminder to that e-commerce is about more than just retail multiples; it's also about placing bets on the most potent multiplier in India's economic development.
The question is no longer whether Indians will shop online, but how deeply digital commerce will reshape the nation’s economy, jobs, and competitiveness. The evidence is clear: e-commerce has moved from convenience to core, from optional to inevitable – the very backbone of India’s growth story this decade.
(Shriram Subramanian is Founder, InGovern Research Services.)
Views are personal and do not represent the stand of this publication.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
