Good day, that is Priyanka Salve, writing to you from Singapore.
Welcome to the newest version of “Inside India“ — your one-stop vacation spot for tales and developments from the world’s quickest rising giant financial system.
Amazon and Walmart’s Flipkart dominate India’s e‑commerce market. This week, I unpack why the U.S. giants are eager to increase within the South Asian nation the place solely 30% of the inhabitants retailers on-line.
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The massive story
Final December, when Amazon pledged a large $35 billion funding in India together with for digitizing over 12 million small companies and enhancing logistical infrastructure, the dimensions of the dedication appeared disproportionate to the market’s dimension.
Solely 30% of Indians shopped on-line in 2025, far behind China (92%) and the U.S. (74%), in response to a Bain & Co. report earlier this month. E‑commerce accounted for simply 1.6% of India’s GDP, in contrast with 4%–4.5% in Indonesia and 13%–14% in China, Bain added.
However then India is the world’s quickest‑rising e‑commerce market, with on-line buying spreading quickly from main metros to smaller cities and cities.
Take Evelyn Nazareth, a schoolteacher in her 30s who lives in Jaipur, and is amongst a rising cohort of avid web shoppers outdoors India’s largest cities. She retailers on main e‑commerce platforms three to 4 instances a month and orders from extremely‑quick supply apps virtually day by day.
As soon as, she ordered a smartphone on-line and acquired a characteristic telephone however was billed for the previous. That disagreeable expertise, nevertheless, didn’t flip Nazareth away from on-line buying. She merely switched platforms.
On-line buying has since turn into a behavior. “I can store anytime with out stepping away from what I am doing,” she mentioned, noting the broader selection obtainable on-line, particularly for style. “After I purchase one thing others round me haven’t got, it makes me really feel totally different.”
Jaipur will not be a metropolis, and it’s these comparatively smaller cities that now account for greater than 60% of India’s web shoppers, Praveen Govindu, a accomplice at Deloitte India, instructed CNBC. They generate an identical proportion of e‑commerce orders, he mentioned, marking “a decisive shift in viewers dynamics.”
Employees scan packages forward of dispatch from the Flipkart success middle at Sanpka in Haryana on August 26, 2025.
Sajjad Hussain | Afp | Getty Pictures
India’s e‑commerce market skilled a compound annual progress of 23% between 2020 and 2025, pushed by each a rising variety of customers and better spending per shopper, Govindu mentioned. Deloitte, in a report on earlier this month, forecast that the sector will turn into a $250 billion market by 2030.
Walmart-owned Flipkart Group, which incorporates Flipkart Minutes, Myntra and Shopsy, “is extensively considered because the market chief in India’s e‑retail panorama,” mentioned Manan Bhasin, a accomplice at Bain & Firm.
In June final 12 months, a report by market analytics agency MerchantSpring mentioned Flipkart holds 48% of the Indian e-commerce market, whereas Amazon has 30%-35%.
Each Bain and Deloitte estimate that about 300 million Indians shopped on-line final 12 months, with most new customers anticipated to return from smaller cities.
“Customers in smaller cities have been at all times simply as aspirational as these in greater ones,” mentioned Yash Dholakia, a accomplice at New Delhi‑primarily based enterprise capital agency Sauce.vc. “What they lacked was entry — and on-line retail is closing that hole.”
Fast rise of fast commerce
The growth of e‑commerce has additionally uncovered smaller‑metropolis customers to premium manufacturers and area of interest merchandise, mentioned Dholakia, whose agency backs a number of on-line‑first shopper manufacturers.
Ten years again, poor web entry, nascent digital funds, and underdeveloped highway infrastructure restricted e‑commerce in smaller cities.
Over time, nevertheless, the rollout of low‑price 5G, fast adoption of Unified Funds Interface (UPI)-based digital funds, and improved highway connectivity have made small cities and cities accessible to main e-commerce corporations, specialists mentioned.
“A shopper in a small metropolis is seeing the identical social media content material — whether or not it is journey, health, or magnificence influencers — as somebody in a metro,” mentioned Dholakia. That publicity is fueling demand for merchandise akin to protein dietary supplements, Korean skincare, and excessive‑finish sneakers.
Trade specialists say the best technique to faucet that demand is thru fast commerce, a mannequin outlined in India by supply instances of below 20 minutes. Everlasting and Swiggy pioneered the format and have pushed bigger gamers like Flipkart and Amazon to comply with swimsuit.
Flipkart, as an example, has expanded its ultra-fast supply providers to 30 cities.
In giant cities, fast‑commerce apps are sometimes used for necessities. In smaller cities, they more and more perform as “premium shops,” Dholakia mentioned. Each Amazon and Flipkart are investing closely in supply networks to help extremely‑quick success.
Addressing shareholders final week, Amazon CEO Andy Jassy mentioned the corporate is quickly increasing its fast commerce supply service, Amazon Now, in India.
“Orders on Amazon Now are rising 25% month over month, with Prime members tripling their buying frequency as soon as they begin utilizing it,” he mentioned.
Deloitte forecasts that by 2030, the variety of web shoppers in smaller cities will likely be roughly double that in main metros, with common month-to-month spending per person rising to $45 from $25 in 2025.
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