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Understanding consumer preferences within omni-channel set-ups
The consumer industry is undergoing a significant transformation. Changing lifestyles, increased digital adoption, and rising disposable incomes are reshaping consumer preferences and business models. Indian consumers now prioritise convenience, quality, and personalised experiences, fueling the growth of direct-to-consumer (D2C) brands, quick commerce (Q-com), and niche platforms. We at Grant Thornton Bharat, conducted a survey of more than 2,500 consumers. The survey findings are used to write this report, which presents a comprehensive analysis of the current trends shaping the consumer industry.
9 out of 10 people are influenced by discounts for purchasing online over offline
E-commerce is still leading mode purchase
Increasing consumers’ focus on quality and sustainable consumption practices
E-commerce in India is on a robust growth trajectory, supported by changing customer demographics, increased smartphone usage and the widespread adoption of digital payments:
Moreover, consumers are increasingly adopting e-commerce platforms, driven by transparent policies, customer reviews, and data clarity. While discounts remain a key factor, trust and accessibility now play a growing role in purchase decisions.
As consumers become more comfortable with online shopping, the demand for premium products, especially in wellness and beauty segments, has surged. Average order values in these segments have increased by 23% over the past year, reflecting a shift towards higher-quality, premium offerings.
While all models are adopting premiumisation as a strategy, consumers still prefer physical stores for high-value purchases.
The Indian Q-com market currently stands at USD 3.34 billion and is expected to reach USD 9.94 billion by 2029. The industry has grown 76% YoY in FY24. While this growth was primarily seen in metro and tier-1 cities, adoption in non-metro cities is increasing. Q-com platforms are mainly witnessing significant demand for essential categories such as groceries, personal care items, and beauty products. More than 30% of respondents opted for Q-com as their preferred mode of purchase for daily essentials. However, 66% of respondents have indicated they would be willing to purchase products valued below INR 10,000 from Q-com platforms.
Q-com players are focusing on boosting average order value (AOV) by foraying into premium categories, with AOV currently moving up from an initial INR 250 to over INR 500. They are developing strategic partnerships with premium and lifestyle brands to offer variety and build customer trust. However, consumers’ propensity to buy is low. High operational expenses related to warehousing and expedited delivery are also a major strain for Q-com players, along with limited basket size, and supply chain disruptions. Concerns over product quality and authenticity, impact consumer confidence and satisfaction.
Q-com companies in India can overcome challenges by adopting a multifaceted approach. Leveraging AI, machine learning, and IoT can streamline operations and optimise deliveries. Partnering with local retailers enhances supply chains, while expanding into Tier 2 and Tier 3 cities unlocks new markets.
Hybrid models enable traditional brick-and-mortar stores to enhance their competitiveness by integrating online platforms and local partnerships. This strategy allows them to offer more competitive pricing, broaden their product selection, ensure consistent quality through curated inventories, and provide delivery options. It also creates seamless, hybrid shopping experiences that cater to modern consumers' needs.
The future of retail lies in combining the strengths of quick commerce — speed and convenience — with the established infrastructure and broader reach of traditional e-commerce and local stores.
From an investment perspective, the consumer sector has shown steady momentum. In 2024 alone, deal values have surpassed USD 7 billion across 321 deals. Q-commerce and niche vertical marketplaces continue to attract significant funding as investors seek sustainable and profitable business models. The 23% growth in online festive season sales gross merchandise value (GMV) further boosts investor confidence in the sector’s potential.
Regulatory measures are also crucial in shaping a secure and transparent marketplace. The Data Protection Act 2023 provides a framework to protect consumer privacy, enhancing trust in digital transactions. Proposed e-commerce policy reforms aim to increase accountability and fairness, fostering an ecosystem that upholds consumer rights while encouraging business innovation.
As India’s retail landscape continues to evolve, brands, e-commerce platforms, and physical stores must adapt their strategies to meet the expectations of a dynamic and increasingly eco-conscious consumer base.
For FMCG players, embracing omnichannel strategies is essential. By diversifying across quick commerce, e-commerce, and traditional retail, these companies can tap into various consumer segments, catering to both convenience-driven shoppers and those valuing in-store experiences. Investment in last-mile logistics and digital platforms will also enhance accessibility, especially in Tier 2 and Tier 3 cities where demand for rapid delivery is rising.
E-commerce platforms must prioritise building trust through transparent policies, consistent product quality, and responsive customer service. As regulatory frameworks around data protection and consumer rights become more stringent, e-commerce players should lead with compliance, positioning themselves as secure and reliable shopping destinations. Investing in premium product lines and personalised shopping experiences can also attract a broader audience, especially consumers seeking high-quality, curated online options.
Physical stores are redefining their role as sales points and experiential hubs where customers can engage with products firsthand. Brick-and-mortar locations should focus on creating immersive shopping environments and leveraging technology for order tracking, home delivery, and personalised in-store services to compete with the digital convenience of e-commerce. Notably, Tier 2 and Tier 3 cities are set to see maximum retail expansion, with a projected 80-85% occupancy rate in premium malls. High-grade malls in these areas are attracting bridge-to-luxury brands, creating lifestyle hubs that offer shopping, dining, and entertainment — an experience online platforms struggle to match.
Ultimately, the future of India’s retail sector will hinge on a seamless blend of online and offline experiences coupled with a strong commitment to sustainability. By aligning strategies with consumer demands for convenience, quality, and responsible practices, industry players can navigate this period of transformation, build trust, and drive sustainable growth.
Grant Thornton Bharat’s latest survey report, titled ‘Beyond the Basket: Understanding Consumer Preferences within Omni-Channel Setups,’ delves into the evolving preferences of Indian consumers as digital adoption and rising disposable incomes reshape shopping behaviors.