India E-Commerce at $550 Bn by 2035; Mall Vacancy Down to 8.1% in 2024: ANAROCK-ETRetail

Mumbai, February 20, 2025: E-commerce has become a fulcrum of change for the Indian retail industry, finds a joint report by ANAROCK and ETRetail released on Thursday at The Economic Times Great India Retail Summit 2025 in Mumbai at the Jio Convention Centre.

The report finds that Indian e-commerce is expected to touch $550 Bn by 2035, growing at a CAGR of 15 per cent. In 2024, the value of this vibrant and disruptive retail segment was estimated at $125 billion. It is likely to touch $345 billion by 2030-end.

Increasing Internet penetration, smartphone adoption, digital payment infrastructure, and a young, tech-savvy population are driving this growth. Government initiatives like ‘Digital India’ and rapid improvements in the country’s logistics and supply chain networks have further boosted its growth prospects.

“Besides the metros, e-commerce players are also tapping the growing demand from smaller towns and cities. Resultantly, the share of online shoppers from Tier II and III cities has increased to 56 per cent in FY2024 from 46 per cent in FY2020, and is expected to reach 64 per cent by FY2030,” says Anuj Kejriwal, CEO & MD – ANAROCK Retail.“Meanwhile, the overall Indian retail industry’s market size is expected to touch $2,500 billion by 2035, witnessing a three-fold increase compared to 2019. The report states that this growth is powered by rising disposable incomes, increasing urbanization, a young and tech-savvy population, and an ever-expanding middle class. Today, the industry is defined by sprawling malls and thriving e-commerce alongside traditional bazaars.”

“New mall supply across the top 7 cities was a mere 1 million square feet (MSF) in 2024, while absorption stood at 6 msf,” says Anuj Kejriwal. “New supply is lagging far behind demand. Current supply and demand trends for mall spaces indicate a post-pandemic rebound in leasing, now largely driven by experiential retail. Apparel and the F&B sectors consistently contribute nearly 45 per cent of demand, remaining the top footfall drivers. Also, post-COVID, the mall vacancy rate has declined from 15.4 per cent in 2019 to 8.1 per cent in 2024.”

The report highlights that major domestic and international retailers have ambitious plans to increase their footprint in India’s smaller towns and cities, resulting in a surging supply of malls in tier 2 and 3 markets which will, potentially, account for over 26 million sq. ft. of mall spaces by 2030.