Online marketplaces in India to hit US$350 billion in gross merchandise value (GMV) in 2027, said Bain recently when releasing the “The Rise of Digital Bazaars in India” report jointly done with Accel.
These online marketplaces in India will be creating US$400-US$500 billion in enterprise value, contributing more than 5% to India’s GDP, the firm noted.
That amount will also enable more than 15 million micro, small, and medium enterprises (MSMEs) to grow their businesses online, and creating 7 million jobs by 2027, Bain added.
“Marketplaces have contributed to India’s growth story by offering greater access to capital and innovative financing solutions for traditionally underserved segments; enabled MSMEs to transact online, with an increased pan-India reach; and have provided employment opportunities to more than 3 million gig workers in India,” Arpan Sheth, Partner at Bain & Company and co-author of the report pointed out
- With a large addressable market, growing online shopper base, and increasingly digitised MSMEs, online marketplaces in India contribute more than US$100 billion in GMV, with B2C e-commerce marketplaces being the single largest segment, contributing $50 billion.
- There are more than 300 funded marketplaces across multiple categories like retail, education, healthcare, travel, and financial services.
- Almost 20 marketplaces reached more than $1 billion in GMV and many players are turning profitable.
- While online marketplaces in India will continue to be dominated by B2C e-commerce with 40% of the total GMV in 2027, the B2B e-commerce marketplaces GMV is slated to grow by five times its current size to reach $55 billion, followed closely by online food delivery which will almost triple in size to reach nearly $22 billion.
- Not just for buyers and sellers, online marketplaces in India have also seen significant traction with investors in recent years, having received cumulative funding of $30 billion between 2018 and October 2022.
- B2C e-commerce, B2B e-commerce, and online food delivery were among the highest- funded marketplaces sectors, together accounting for close to 60% of total funding received in the last five years.
- From B2C e-commerce marketplaces leading the share of deal volumes in 2018, B2B e-commerce marketplaces emerged as the frontrunner in 2022, with deal volumes growing to 31% of the total deals in the year so far.
- 2021 was a landmark year, which saw funding in marketplaces reaching US$16 billion, growing four times compared to 2018 and deal volumes doubling in the same period.
- However, in 2022 year-to-date marketplace funding activity has been moderate at US$4.5 billion, given the tempering of 2021 highs, valuation corrections, and muted sentiments in global public markets.