India’s emerging e-commerce hotspots: Visakhapatnam, Ghaziabad and Faridabad

Visakhapatnam, Ghaziabad and Faridabad are emerging as India’s newest new e-commerce hotspots, according to a new report evaluating the potential of 100 major cities for digital commerce.

Bengaluru, Mumbai and Delhi, as expected, top the list, according to the India Digital Commerce Index report by consulting firm Kearney and e-commerce marketplace Meesho.

“The second cohort of cities includes the major tier 1 cities of Chennai, Hyderabad, Kolkata, Ahmedabad, and Pune,” the report stated, adding that India’s e-commerce market is expected to be valued at roughly $200 billion by 2026.

“As a growing hotspot, Visakhapatnam is a strategic focus for e-commerce behemoths and is close to fulfillment centers. Ghaziabad and Faridabad are also in the top 20, thanks in part to their proximity to the national capital,” it added. “… Lucknow is also one of the top cities, with its digitally accustomed population.”

Kearney also identified markets that are likely to show greater affinity for e-commerce, among them the northeastern states and the Hindi heartland.

Typically under-penetrated by offline brands, these areas show heightened e-commerce potential that’s likely to show disproportionate growth outpacing that of offline retail, according to the report.

For instance, in the Hindi heartland region cities such as Varanasi, Allahabad, Gorakhpur, and Noida in Uttar Pradesh; Jamshedpur and Ranchi in Jharkhand; and Cuttack in Odisha reveal an increasing appetite for e-commerce, the report said.

“The rapid unlock of new customer segments and emerging geographies is an indicator of the robust growth of the Indian e-commerce space,” said Karan Dhall, partner, consumer and retail practice, at Kearney. “Underpenetrated regions like the northeast and the Hindi heartland are coming into the fold and the female e-shopper base is also expanding rapidly.”

The index also revealed that different cities exhibit diverse behaviour when it comes to categories. While Bengaluru is the top city overall on the index, Mumbai outperformed it in food and grocery as well as electronics purchases. Chennai and Hyderabad outpaced Delhi in apparel, accessories, and home furniture and furnishings sales.

India’s e-commerce market touched $75-80 billion in 2022 and is expected to grow 20% year-on-year till 2030, according to the report. This growth, it said, will be led by increased penetration in existing markets and new customer segments, including shoppers from tier 3 and tier 4 cities and rural areas.

“In addition to one-time buys such as electronics, home, and kitchen, digital commerce is expected to boom in everyday categories such as beauty and personal care, apparel, accessories, and jewelry over the next few years, primarily driven by growth in the female consumer base and deeper penetration in rural India,” the report said.