Synopsis
The report titled How India Shops Online, 2026, says the growth has come on the back of improved consumer sentiment supported by policy-led tailwinds and major traction from Tier 2 markets.“E-retail mirrored this recovery, growing 19% to 21% in 2025. Improving macro conditions and consumer sentiment supported second-half growth of 22% to 24%, roughly 1.5X the year-over-year growth seen in the first half,” the report titled How India Shops Online, 2026, noted.
Besides an increase in consumer spending, the seller base also expanded with major traction coming from the Tier-II markets. Overall, ecommerce GMV more than doubled over the past five years, reaching $65-$66 billion in 2025. Gross merchandise value (GMV) refers to the total value of the goods sold by the platform.
Gen Z, Tier II+ cities, and middle-income households contributed to the majority of new shoppers in the ecommerce segment. The report highlighted that one in four new shoppers were onboarded in the 2025 festive period.
Notably, ahead of the ecommerce festive season in 2025, the central government rolled out GST 2.0, slashing the Goods and Services Tax (GST) for products across segments, including daily essentials, appliances, healthcare, and fashion priced under Rs 2,500.
Last year’s festive sale was watched closely by industry experts since the segment had witnessed slow growth for the past two years.
Quick commerce growth
Meanwhile, quick commerce remained the fastest-growing segment in the overall online retail market as incumbents expanded rapidly and new entrants like Amazon Now and Flipkart Minutes also caught up.
According to the report, quick commerce scaled to $10-11 billion GMV in 2025, “supported by structural factors such as high population density, low manpower and real estate costs, and low online grocery penetration.”
“Quick commerce serves a dual role: a convenience channel for essentials and a fulfilment channel for discretionary categories like electronics. Household essentials remain the mainstay, contributing 85-90% of GMV,” said Manan Bhasin, partner, Bain & Company, and one of the authors of the report.
Quick commerce accounted for 16-17% of the total e-retail GMV, which was slightly higher than other markets, including China, the report stated.
“Commerce in India is evolving fast. Shoppers today arrive knowing what they want, with shorter sessions and higher intent, especially on quick commerce. For brands, winning means showing up at exactly the right moment with the right message,” said Vijay Iyer, vice president, ads, Flipkart.
The dark store network has expanded to over 7,000 centres across more than 200 cities as platforms expanded their presence to Tier II+ markets.
