Very interesting. Every time I see these reports forecasting high growth over the next 3 / 5 / x years, I always wonder why no one ever looks at past reports to verify how accurate they turned out to be - so thank you for sharing this analysis!
Also, a few thoughts:
1. Using China as a benchmark or leading indicator for India is looking less and less accurate as time goes by. China's market size across categories is in a genuinely different league altogether:
- Online food delivery annual transacting users: 100M at best in India, while China's largest OFD player Meituan has 770M ATUs across verticals; so safely at least 600M overall in China (6X)
- McDonald's outlets: 757 in India vs 7,740 in China (10X)
- Starbucks outlets: 504 in India vs 8,000+ in China (16X, and this is when Starbucks has struggled in China - Luckin Coffee has 30,000 stores)
- Luxury car sales: 50K in India vs BMW, Mercedes & Audi alone at 1.8M in China (36X, and this is after these 3 players have seen multi-year declines, with Chinese brands gaining popularity)
Analysts don't say that India will eventually match China's market sizes on QSRs / cafes / cars / etc, so I wonder why we keep making this comparison for eCommerce. The fact is, China has created a massive middle class, which India hasn't, and hence not only are their B2C categories much bigger, but also India won't see a similar trajectory unless our middle class grows as well.
2. This and other eCommerce reports seem to suggest that what's holding back the next 100 - 200M consumers from shopping online is a lack of access / knowledge / language understanding / trust in online shopping / etc - and hence tech solves to improve supply or reduce friction will be the big unlock. I don't think this is completely true - income growth is likely the real bottleneck for all commerce growth, whether online or offline.
3. Growth has already slowed for legacy eCommerce players, and a lot of current eCommerce growth is being driven by Quick Commerce, which is in turn at least partly led by channel shifts from GT and MT. So even the current CAGR of 21-22% assumed over 2025-30 might just turn out to be slightly optimistic, if you ask me. 45-50% of incremental GMV is expected to come from Quick Commerce, per the report - so if this engine also eventually moderates, I'm not sure what else will drive significant eCommerce growth.
Of course, income growth may surprise on the upside, which will lift all boats - but at present, that's an imponderable.
Great post Manish. So much business analysis is based on "expert" reports like these Bain forecasts. Often they turn out to be way off the mark but no-one seems to bother. Big consultants, data companies and academic institutions still keep churning the PR mill.
Very interesting. Every time I see these reports forecasting high growth over the next 3 / 5 / x years, I always wonder why no one ever looks at past reports to verify how accurate they turned out to be - so thank you for sharing this analysis!
Also, a few thoughts:
1. Using China as a benchmark or leading indicator for India is looking less and less accurate as time goes by. China's market size across categories is in a genuinely different league altogether:
- Online food delivery annual transacting users: 100M at best in India, while China's largest OFD player Meituan has 770M ATUs across verticals; so safely at least 600M overall in China (6X)
- McDonald's outlets: 757 in India vs 7,740 in China (10X)
- Starbucks outlets: 504 in India vs 8,000+ in China (16X, and this is when Starbucks has struggled in China - Luckin Coffee has 30,000 stores)
- Luxury car sales: 50K in India vs BMW, Mercedes & Audi alone at 1.8M in China (36X, and this is after these 3 players have seen multi-year declines, with Chinese brands gaining popularity)
Analysts don't say that India will eventually match China's market sizes on QSRs / cafes / cars / etc, so I wonder why we keep making this comparison for eCommerce. The fact is, China has created a massive middle class, which India hasn't, and hence not only are their B2C categories much bigger, but also India won't see a similar trajectory unless our middle class grows as well.
2. This and other eCommerce reports seem to suggest that what's holding back the next 100 - 200M consumers from shopping online is a lack of access / knowledge / language understanding / trust in online shopping / etc - and hence tech solves to improve supply or reduce friction will be the big unlock. I don't think this is completely true - income growth is likely the real bottleneck for all commerce growth, whether online or offline.
3. Growth has already slowed for legacy eCommerce players, and a lot of current eCommerce growth is being driven by Quick Commerce, which is in turn at least partly led by channel shifts from GT and MT. So even the current CAGR of 21-22% assumed over 2025-30 might just turn out to be slightly optimistic, if you ask me. 45-50% of incremental GMV is expected to come from Quick Commerce, per the report - so if this engine also eventually moderates, I'm not sure what else will drive significant eCommerce growth.
Of course, income growth may surprise on the upside, which will lift all boats - but at present, that's an imponderable.
Great post Manish. So much business analysis is based on "expert" reports like these Bain forecasts. Often they turn out to be way off the mark but no-one seems to bother. Big consultants, data companies and academic institutions still keep churning the PR mill.
i don't know man, the 2030 forecast feels pretty on point, the quick commerce will be equally be as big as the normal non quick e commerce
160 billion is doable, indian economy has been a lagard in this space, way behind the forcasts