India e-commerce to grow 27%, Reliance to dominate online grocery

New Delhi: India's e-commerce business is expected to grow at a compound annual growth rate (CAGR) of 27 per cent to reach $99 billion by 2024, Goldman Sachs said projecting that Reliance Industries would capture half of the online grocery sales through its Facebook. In a report titled 'Global Internet: e-commerce's steepening curve', Goldman Sachs said the Covid-19 pandemic has driven a doubling of penetration of e-commerce globally with categories such as consumer packaged goods driving as much as three years of penetration growth in three months.

"We forecast India e-commerce will reach $99 billion by 2024, growing at a 27 per cent CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth in our view," it said. Online penetration of retail is expected to reach 10.7 per cent by 2024, versus 4.7 per cent in 2019. "The biggest near term theme in India internet, in our view, is the foray of Reliance Industries (India's largest market-cap company with presence across sectors such as energy, telecom, and retail) into e-commerce, and the company's tie-up with WhatsApp for online grocery," it said.

Facebook has picked up a 9.99 per cent stake in Jio Platforms, the subsidiary of RIL that houses the country's youngest but biggest telecom company as well as an array of apps. RIL's e-commerce venture, JioMart plans to use Facebook's WhatsApp to connect local grocery stores with customers.

Goldman Sachs said Bigbasket and Grofers accounted for more than 80 per cent of the market in 2019 in online grocery.

Online grocery has been growing at over 50 per cent year-on-year for the last couple of years, but with the outbreak of Covid-19 resulting in shift to online, and the recent entry of RIL, the growth will accelerate to 81 per cent CAGR during 2019-24, it said.