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The 2023 report on how India shops online provides a comprehensive analysis of the e-retail landscape in India.

E-retail has significantly disrupted global retail, with online-first retailers now constituting up to two-thirds of the sales of the top ten global retailers. The COVID-19 pandemic accelerated e-retail adoption worldwide, with a notable acceleration in India.

The Indian e-retail market is expected to reach $57-$60 billion in 2023, with an annual growth of 17%-20% from 2022. This growth is slightly slower than the historic rate due to inflationary pressures. The market still has considerable potential for expansion, with online spending constituting only 5%-6% of total retail in India. Key growth drivers include increased access to digital and physical infrastructure, improved affordability, and the emergence of digital ecosystems. It’s anticipated that increased GDP per capita will further propel e-retail growth, with 60-70 million households expected to join the upper income brackets by 2028.

: India’s e-retail shopper base is becoming increasingly diverse, with a significant portion residing in Tier 2+ cities and belonging to younger generations and lower-income groups. The seller base is also expanding, with new entrants focusing on lifestyle, home, and electronics categories, resonating especially with younger consumers.

New e-retail models are emerging, including quick-commerce (Q-commerce), hyper-value commerce, inspiration-led commerce (live commerce), and fast fashion. Each model caters to different consumer needs and preferences and is at varying stages of maturity and adoption in India.

The e-retail industry is increasingly focusing on profitability, with retailers adopting various monetization strategies such as advertising, seller services, fintech, externalization of services, and loyalty programs. In India, advertising-led monetization is particularly prominent, showing significant growth potential.

Generative AI is poised to transform the e-retail experience in India, impacting discovery, seller enablement, targeted marketing, customer support, and business efficiency. E-retailers, including major players like Flipkart, are experimenting with AI to enhance the online shopping experience and make it more akin to offline shopping.

Source: Bain / Summary: AI generated

The Altagamma-Bain Luxury Market Monitor 2021 reveals the resilience of the luxury market amid COVID-19, highlighting rapid digitalization and shifting consumer trends. It emphasizes the growth in online channels, sustainability focus, and market shifts towards Asia and the Americas. The report’s key findings include:

Resilience of the luxury goods market during COVID-19.

Accelerated shift towards digitalization in the luxury sector.

Changing consumer preferences impacting market dynamics.

Significant growth in online sales channels.

Increased focus on sustainability in the luxury industry.

Geographical market shifts, with notable growth in Asian and American markets.

Source: Altagamma Bain

The 2011 Altagamma Worldwide Luxury Market Monitor reveals a strong recovery in the personal luxury goods market in 2010-2011, following the 2009 economic crisis. The market rebounded with double-digit growth rates, driven by rising consumer confidence and a resurgence in China’s demand. Exchange rate fluctuations had varying impacts in 2010 and 2011, but the overall trend remained positive. The luxury market’s future, despite socio-economic uncertainties, looks promising for 2012, with growth anticipated from emerging markets, particularly China and Latin America. Europe’s consumption patterns remain uncertain, but retail continues to be a crucial sector, with hard luxury and accessories expected to lead the growth.

Core findings:

Significant Recovery Post-Crisis (2010-2011): The personal luxury goods market experienced phenomenal growth in 2010 and 2011 following the 2009 economic downturn. This recovery was marked by increased consumer confidence and channel and wardrobe restocking.

China as a Major Growth Driver: China played a pivotal role in driving market growth during this period, signaling a shift in the luxury market’s geographic focus.

Impact of Exchange Rates: Exchange rate fluctuations significantly impacted market trends in 2010 and 2011, influencing growth rates in different ways across these years.

Positive Market Outlook for 2012: Despite socio-economic challenges, the luxury market was expected to continue growing in 2012, driven by emerging markets, especially China, Latin America (notably Brazil and Mexico), and Asia Pacific regions.

Sector Performance: Hard luxury and accessories sectors were outperforming other categories, indicating a shift in consumer preferences within the luxury market.

Source: Altagamma Bain

This report highlights trends in three luxury market segments: High-End Furniture, Luxury Yachts, and Personal Luxury Goods. The high-end furniture market experienced solid growth in 2007 and 2008 but faced challenges in 2009 due to slowing consumer consumption and a stagnant real estate market​​. However, long-term potential remains strong, driven by brandization, ecological trends, and growth in emerging markets​​.

The luxury yacht market has shown resilience to economic cycles, doubling in size over the past eight years, with significant growth in 2008. Its future growth is expected to be driven by High Net Worth Individuals (HNWIs) and emerging markets, particularly the super-luxury segment​​.

Personal luxury goods had a good year in 2007, a safe 2008, but 2009 was expected to be challenging​​. This sector was impacted by exchange rates, price increases not resulting in higher average prices, and a decline in resilience for entry-to-luxury brands​​. Retail growth outpaced wholesale, indicating a shift towards new store openings and a risk-averse approach​​. Online shopping boomed, offering different consumer dynamics and lower psychological barriers to purchasing​​.

Emerging markets provided a buffer for luxury players against global economic slowdowns, with Asia Pacific showing notable growth. The Americas entered a more challenging phase, while Japan experienced a luxury recession​​.

Specific categories like hard luxury, accessories, and shoes showed excellent performance. Menswear’s growth pace began to slow, while demand for more luxurious leather goods increased​​. Watches remained an evergreen category, but the impact of the 2009 financial crisis was a concern. Jewelry, after a strong performance in 2007, faced a slowdown in 2008, and fragrances were more dynamic in 2007, while cosmetics were less impacted by a weak 2008 holiday season​​.

Source: Altagamma Bain