Unlocking Potential: How Small Towns are Thriving in E-Commerce’s Fastest-Growing Arena, Led by Amazon and Walmart
Hello from Singapore! I’m Priyanka Salve, bringing you the latest edition of “Inside India,” your go-to source for insights and developments from one of the world’s fastest-growing major economies. This week, I delve into why Amazon and Walmart’s Flipkart are intensifying their focus on a market where only 30% of the population currently shops online.
In December 2022, Amazon announced an ambitious $35 billion investment in India, aimed at digitizing over 12 million small businesses and enhancing logistics. At first glance, this commitment seemed excessive for a market where only 30% of Indians engaged in online shopping in 2025, significantly lagging behind China’s 92% and the U.S.’s 74%, according to a Bain & Company report. E-commerce contributed merely 1.6% to India’s GDP, compared to 4% in Indonesia and 13% in China. Yet, no one can ignore that India is the fastest-growing e-commerce market globally, with online shopping rapidly extending from urban centers to smaller towns.
Consider Evelyn Nazareth, a schoolteacher residing in Jaipur. She exemplifies a burgeoning group of online shoppers outside major cities, purchasing items on e-commerce platforms three to four times a month. Despite encountering a mix-up where she received a feature phone instead of the smartphone she ordered, Nazareth remains undeterred. “I can shop anytime without stepping away from what I’m doing,” she said, highlighting the broader selection available online, particularly in fashion. Smaller cities now represent over 60% of India’s online shoppers, a shift noted by Praveen Govindu at Deloitte India.
India’s e-commerce sector has been experiencing a compound annual growth rate of 23% from 2020 to 2025, fueled by an increasing number of users and greater spending per shopper. Deloitte projects that by 2030, this sector will grow into a $250 billion market. Walmart’s Flipkart Group, which includes Flipkart Minutes, Myntra, and Shopsy, is seen as a leader within this landscape. Recent data indicated that Flipkart holds 48% of the Indian e-commerce market, while Amazon commands 30% to 35%.
Experts suggest that online shopping aspirations among consumers in smaller cities are increasingly aligning with those in metropolitan areas. “They always aspired to similar lifestyles; they just needed access, and online retail is bridging that gap,” said Yash Dholakia of Sauce.vc.
A noteworthy trend is the rise of quick commerce, where deliveries occur within 20 minutes. This concept, popularized by firms like Eternal and Swiggy, is prompting giants like Flipkart and Amazon to ramp up their delivery services. Flipkart has extended its ultra-fast delivery to 30 cities, with Amazon reporting a 25% month-over-month growth in its quick commerce service, Amazon Now.
As we look to the future, Deloitte forecasts that smaller cities will boast twice as many online shoppers as major metropolitan areas by 2030, with average monthly spending per user projected to rise from $25 in 2025 to $45.
In other news, India is facing energy security challenges amidst escalating tensions in the Strait of Hormuz and is feeling the impact of U.S. policies. Meanwhile, Tata Consultancy Services’ CEO believes that advancements in artificial intelligence will generate new job opportunities rather than lead to layoffs, reassuring the workforce in India’s software sector.
Stay tuned for more insights and updates from India-a hub of innovation and growth!
Tags: e-commerce, India, Amazon, Flipkart, online shopping, quick commerce, digital transformation
Original Source: https://www.cnbc.com/2026/04/15/inside-india-newsletter-small-towns-amazon-walmart-ecommerce.html
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Publish Date: 2026-04-16 06:10:00
