Gen Z and tier 2 cities drive e-commerce growth in India: Meesho Report
Projections suggest that by 2030, mass consumers will dominate 65% of the retail market as more Indians transition from traditional to digital retail.
In a rapidly evolving digital landscape, e-commerce growth in India is experiencing unprecedented acceleration, driven by the rising influence of Generation Z and the increasing participation of consumers from tier 2 and beyond cities. According to the latest insights from Meesho’s Smart Shopper Report, these shifts are reshaping the future of online shopping nationwide.
E-Commerce Growth in India: Gen Z and Tier 2 Cities Lead the Charge
One of the most striking trends highlighted by the report is the significant role of Gen Z in the e-commerce growth in India. The report reveals that one in every three online shoppers in India is now under the age of 25, marking Gen Z as the fastest-growing demographic in the e-commerce space. This young and tech-savvy generation is gravitating towards online platforms for their shopping needs, driven by the desire for convenience and a diverse range of products. Their preference for digital shopping is pushing e-commerce players to innovate rapidly to meet the demands of this tech-savvy audience.
Traditionally, metro cities have dominated the e-commerce market, but the focus is shifting towards tier 2 and beyond cities. According to the Smart Shopper Report, Uttar Pradesh and Bihar are emerging as leaders in user growth, with significant contributions from cities such as Ambur, Rourkela, Sangli, and Zirakpur. These regions are not only increasing their user base but are also showing a high rate of repeat purchases, particularly in categories such as women’s fashion, footwear, and baby care. This trend indicates a growing acceptance of e-commerce among consumers in smaller towns and rural areas, further fueling the e-commerce growth in India.
Digital Inclusion and Changing Consumer Preferences
The e-commerce growth in India is also reflected in the expanding digital footprint across various regions. Meesho’s report emphasizes the platform’s role in driving e-commerce adoption in tier 4+ cities and rural areas. The rise of content creators from remote locations, such as Bazpur in Uttarakhand and Kotputli in Rajasthan, highlights the increasing digital inclusion across the country. These creators are contributing to a more inclusive digital ecosystem, fostering a greater connection between consumers and the e-commerce platforms they use.
Additionally, the adoption of vernacular languages and voice search has seen substantial increases, with growth rates of 162% and 40%, respectively. These figures underscore a strong consumer preference for regional languages and user-friendly features, making online shopping more accessible to a broader audience across India’s diverse linguistic landscape. By accommodating regional preferences, e-commerce platforms are enhancing user experience and driving further growth.
Meesho, which continues to be the most downloaded shopping app in India with over 20 crore downloads in 2024, has nearly doubled its seller base this year, adding 3 lakh new sellers. This growth is evident in the high level of customer engagement, with the platform receiving 692 million ratings, 185 million reviews, and 47 million pieces of user-generated content. Such extensive interaction highlights the platform’s popularity and its pivotal role in the e-commerce growth in India.
The influence of social media on shopping habits is also significant. In the Northeastern states, for instance, 40% of all e-commerce orders are driven by influencer content. This indicates a growing trend where social media platforms play a crucial role in shaping consumer decisions and driving online purchases.
As lifestyles become increasingly hectic, there is a noticeable shift towards self-care and home improvement. Meesho has reported a surge in demand for at-home salon treatments, men’s grooming products, and home and kitchen upgrades. Categories like wall art, kitchen tools, and eco-friendly products have gained popularity, reflecting the changing priorities of Indian shoppers. These trends illustrate how evolving consumer preferences are influencing the e-commerce growth in India and shaping the future of online shopping.
With these trends in mind, the future of e-commerce in India appears promising. Projections suggest that by 2030, mass consumers will dominate 65% of the retail market as more Indians transition from traditional to digital retail. The continued expansion of online shopping platforms, coupled with the increasing digital inclusion of diverse regions, will likely drive further growth and transformation in the Indian e-commerce sector.
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