Indian Consumer Tech At An Inflexion Point: Report

The pandemic accelerated digital penetration by 12-24 months across different sectors and it is boosting the adoption of e-commerce and reaching a total of 350-400 million online shoppers by 2025, according to BCG-Matrix Partners India Report.

The report claimed that the Indian consumer tech space has seen significant value creation with over USD 250 billion in valuation and over 40 unicorns as of December 2022.

The Indian economy continues to show sustained growth, with increasing affluence and discretionary spending, according to a new report by Boston Consulting Group (BCG) and Matrix Partners India.

The report also pointed out the democratisation of online commerce with a large proportion of new shoppers in tier 2 cities and a 1.8 times increase in time spent online by consumers on social media in the last 3 years.

Marketplaces are overtaking search engines as new search sites with 35 to 40 per cent of consumers choosing marketplaces for searches in select user categories, such as electronics, fashion, mobile, food and FMCG and beauty and personal care, according to the report.

The rise of emerging technologies such as generative AI could have multiple potential applications in e-commerce and ONDC could provide a further fillip to e-commerce penetration, the report added.

Siddharth Agarwal, Principal at Matrix Partners India said, “In the next 5-10 years, India's economy is projected to grow by USD 3.5 trillion, which is equivalent to the amount added since its independence 75 years ago. This growth is expected to result in a remarkable surge in per-capita income, leading to an increase in discretionary spending that has not been witnessed in the past.

India's consumer tech sector has already demonstrated early successes, with over 40 unicorns creating a value of more than USD 250 billion. This presents a unique opportunity for entrepreneurs to tap into a rapidly growing market and contribute to the country's economic growth while solving real-world problems, Agarwal added. 

“The last 5 years have seen 4,351 consumer tech deals and USD 54 billion in deal flows in India and this was enabled by a continuously deepening market with almost 98 million digital natives in the country in 2022. We see the same fundamentals holding strong and expect 350-400 million online shoppers by 2025, spending USD 150 billion, said Parul Bajaj, Managing Director and Partner at Boston Consulting Group.