India's digital consumer market to surpass $1 trillion by 2030
What's the story
India's digital consumer market is expected to surpass the $1 trillion mark by 2030, a new report from Bessemer Venture Partners has said. The growth will be driven by mobile-first behavior and an influx of new consumer brands. The study highlights that increased smartphone adoption, affordable mobile data, and seamless payment options have created a "triple engine" of commerce, content, and consumer discernment in India.
Market dynamics
Mobile internet penetration is changing commerce and brand-building in India
Anant Vidur Puri, a partner at Bessemer Venture Partners and one of the report's authors, said even a conservative growth rate of 20% per year would push India's digital economy past the trillion-dollar mark. He added that increased time spent on phones, easier access to products, and rising consumer aspirations are all contributing factors. The report also noted that mobile internet penetration is changing commerce and brand-building in India.
Brand visibility
Digital platforms have become virtual shelves
The report highlights that digital platforms have become virtual shelves, giving smaller, niche consumer brands national prominence almost overnight. Puri said if a brand is a new disruptor or trendsetter in the market, the new consumer is looking for them and platforms will come to get them. He emphasized that retention is key to long-term growth and can greatly impact a brand's revenue predictability.
Retention strategy
Retention is the single most important thing, says Puri
Puri stressed that while a brand can scale rapidly, it must eventually live up to the test of retention. He said, "Retention is the single most important thing; it changes your time to revenue predictability, reduces your marketing working capital, increases your EBITDA (earnings before interest, taxes, depreciation and amortization), and reduces your cash burn." This highlights how crucial consumer retention is for sustainable business growth.
Market diversity
Precision in pricing and positioning critical for new brands
Bessemer's report highlights that India's digital consumer market is a collection of many segments, making precision in pricing and positioning critical for new brands. Puri said, "You have to define very clearly; is your TAM (total addressable market) a ₹100 lipstick, a ₹500 lipstick, or a ₹1,999 lipstick?" He emphasized that at each price point someone will consider it 'cheap' and someone else 'expensive,' highlighting the need for precise market targeting.
Generational shift
India joins China in having digital commerce account for economy
With an estimated 600 million Indians born after 2001, Puri said the consumer trend is being shaped by a generation for whom mobile commerce and digital payments are second nature. He added this generation spends more than half their waking hours online, shopping, watching movies, consuming content, learning and spending. This trend positions India to join China where digital commerce accounts for over 15% of its economy.