India e-retail shifts toward instant delivery and AI shopping

Tier 2+ cities and Gen Z accelerate $66b market expansion across its digital retail economy.

India’s e-retail market is shifting towards faster delivery models, Tier 2+ city demand, and early-stage artificial intelligence (AI)-led shopping, according to a Bain & Company report.

It estimates India’s e-retail gross merchandise value (GMV) reached $65b to $66b in 2025, with at a compound annual growth rate (CAGR) of 19% to 21%.

The market has more than doubled over the past five years, with shoppers rising to around 290 million to 300 million and the seller base tripling over the same period, led by Gen Z, Tier 2+ cities, and middle-income households.

E-retail penetration remains at around 1.6% of gross domestic product, compared with 4% to 4.5% in Indonesia and 13% to 14% in China, indicating room for expansion.

Bain expects e-retail to grow at more than 20% CAGR through 2030, reaching $170b to $180b in GMV.

By the end of the decade, online channels are projected to account for 10% to 12% of total retail spend and 28% to 30% of non-grocery retail spend.

Quick commerce reached $10b to $11b in GMV in 2025 and has doubled annually since 2023, accounting for around 16% to 17% of e-retail GMV.

Bain projects it could reach $65b to $70b by 2030 and contribute 45% to 50% of incremental growth.

Conversational commerce remains early-stage, with more than 160 million monthly active ChatGPT users in India.

The report said AI is shifting retail journeys from search-led discovery to assisted shopping, with retailer-led and LLM-led models emerging in parallel.

Bain said e-retail platforms are likely to retain market share due to fulfilment networks, brand trust, and pricing structures. It added that e-retail advertising accounts for around 25% of digital ad spend.

Private consumption growth rose to 10.5% in 2025 from 8% in 2022 to 2024 following policy support and easing inflation, the report said.