India’s online retail market is projected to exceed $90 billion in 2026, expanding by 22%–24% year over year as consumers increasingly purchase groceries, beauty products, household essentials and furniture online. According to Redseer Strategy Consultants, the market recorded nearly $38 billion in gross merchandise value (GMV) during the first half of 2026, representing approximately 25% growth and its strongest first-half performance in four years. The forecast points to a changing e-commerce landscape in which everyday consumption categories are becoming increasingly important alongside traditional electronics and fashion purchases.
One of the biggest developments is grocery’s expected rise above mobile phones to become India’s second-largest online retail category, behind fashion. Grocery GMV is forecast to grow 50%–53% in 2026, while beauty and personal care could expand 36%–39% and home and furniture 31%–34%. Quick-commerce services, value-focused shopping platforms and growing demand beyond major metropolitan areas are contributing to this shift. The projections suggest that India’s next phase of online retail growth will depend increasingly on frequent, routine purchases rather than relying primarily on occasional big-ticket electronics sales.
Key Takeaways
- Market size: India’s online retail market is projected to exceed $90 billion in 2026.
- Annual growth: Redseer forecasts expansion of 22%–24%, potentially making 2026 the market’s fastest-growing year in five years.
- First-half performance: Online retail GMV reached nearly $38 billion in the first half of 2026, up approximately 25% year over year.
- Grocery growth: The category is expected to expand 50%–53% and increase its share of online retail GMV to 19%.
- Mobile sales slow: Mobile-phone sales recorded no growth in the first half, with full-year growth forecast at just 2%–3%.
- Other growth drivers: Beauty and personal care could grow 36%–39%, while home and furniture may expand 31%–34%.
- Consumer behaviour: Quick commerce, value commerce, younger shoppers and demand from smaller cities are reshaping online shopping.
India’s Online Retail Market Is Entering a New Growth Phase
India’s e-commerce sector has benefited from wider internet access, digital payments, improved logistics and the expansion of online marketplaces into smaller cities. However, the latest projections suggest that the mix of products driving growth is changing.
Historically, smartphones and other electronics have been important categories for online retailers because they attract large transaction values and strong promotional demand during festive sales. In 2026, grocery and other everyday categories are expected to contribute more substantially to incremental online spending.
Redseer’s forecast of more than $90 billion in annual online retail GMV represents a significant milestone for the sector. The projected 22%–24% growth rate also indicates that online retail could be expanding faster than many mature retail markets.
The first-half results provide an important indicator of this momentum. GMV reached nearly $38 billion, growing around 25% compared with the same period in 2025. This measure represents the total value of merchandise sold through the covered online retail channels; it should not be confused with the revenue earned by e-commerce companies, which may recognise commissions, delivery fees or product sales differently.
The full-year projection remains a forecast rather than a confirmed result. Actual performance will depend on festive demand, consumer spending, discounts, product availability and broader economic conditions.
Grocery Is Set to Become the Second-Largest Online Category
Grocery is emerging as one of the strongest drivers of India’s digital retail market. Redseer expects the category to grow 50%–53% in 2026, increasing its share of online retail GMV from 16% in 2025 to 19% this year.
That growth could allow grocery to overtake mobile phones as the second-largest category in online retail, behind fashion.
| Metric | 2025 or earlier period | 2026 forecast |
|---|---|---|
| Total online retail market | — | More than $90 billion |
| Overall annual growth | — | 22%–24% |
| Grocery share of online retail GMV | 16% in 2025 | 19% in 2026 |
| Grocery annual growth | — | 50%–53% |
| Mobile-phone share of online retail GMV | 19% in 2025 | Around 16% in 2026 |
| Mobile-phone annual growth | — | 2%–3% |
Source: Redseer Strategy Consultants’ India Online Retail 2026 outlook. Figures are forecasts and rounded where appropriate.
The growth reflects the increasing convenience of ordering everyday necessities through digital platforms. Consumers can purchase packaged foods, beverages, household supplies and other essentials without making a physical trip to a supermarket.
Unlike smartphones, which many customers replace only after several years, groceries are purchased repeatedly. That gives retailers more opportunities to encourage repeat orders, personalise recommendations and build customer relationships.
However, grocery retail has its own operational challenges. Products may be perishable, order values can be relatively small, and rapid delivery requires efficient inventory management and local fulfilment networks. Platforms must balance customer convenience with delivery costs, product availability and profitability.
Quick Commerce Is Changing How Indians Shop
Quick commerce has become an increasingly important part of India’s online retail ecosystem. These services focus on delivering products quickly from nearby stores, warehouses or local fulfilment centres.
The model initially gained attention through grocery and household essentials, but its product range has expanded to include snacks, personal care products, electronics accessories and other everyday items.
Redseer’s broader market analysis estimated that quick commerce generated approximately $9 billion in GMV during the first half of 2026, while its monthly transacting user base exceeded 60 million.
The growth suggests that quick commerce is not simply shifting purchases from traditional e-commerce websites to faster delivery services. It may also be encouraging consumers to make additional online purchases that they would previously have made at nearby shops—or not made at all.
For example, a customer may order a missing cooking ingredient, a personal care product or a household item because it can arrive quickly. Such purchases can increase order frequency and make online retail more integrated into daily routines.
However, rapid delivery also requires spending on warehouses, inventory, delivery personnel and technology. High order volumes alone do not guarantee sustainable profits. Platforms need sufficient demand within each service area to justify their operating costs.
Beauty, Personal Care and Home Products Gain Momentum
Grocery is not the only category expected to grow faster than the overall market. Beauty and personal care (BPC), along with home and furniture products, are projected to contribute significantly to online retail expansion.
| Category | Forecast growth in 2026 |
|---|---|
| Grocery | 50%–53% |
| Beauty and personal care | 36%–39% |
| Home and furniture | 31%–34% |
| Mobile phones | 2%–3% |
Source: Redseer Strategy Consultants. Growth rates are forecasts for calendar year 2026.
Beauty and personal care products benefit from online discovery, customer reviews, influencer recommendations and a broad selection of brands. Digital platforms allow consumers to compare ingredients, prices and product features before making a purchase.
Online channels can also help newer brands reach customers outside the locations where their physical retail presence is strongest. Personal care products often lend themselves to repeat purchases, while beauty shoppers may explore different products through recommendations and promotions.
Home and furniture products present a different opportunity. Online platforms allow customers to browse a wider selection of furniture, decor and household goods than may be available in nearby stores. Product photographs, reviews, delivery options and return policies can help consumers make purchasing decisions.
These categories also create operational demands. Furniture can require specialised transport and installation, while beauty retailers must manage product authenticity, customer trust and returns. The strongest growth will therefore depend on more than simply listing additional products online.
Why Mobile Phone Sales Are Slowing
Mobile phones remain a major category in India’s online retail market, but their growth has weakened significantly in 2026.
According to Redseer, online mobile-phone sales recorded zero year-over-year growth in the first half of the year. Full-year growth is forecast at only 2%–3%, while the category’s share of online retail GMV is expected to decline from approximately 19% in 2025 to 16% in 2026.
The slowdown comes as higher smartphone prices put pressure on affordability. When devices become more expensive, consumers may delay upgrades, choose lower-priced models or continue using their existing phones for longer.
Smartphone purchases also differ from grocery shopping in frequency. A household may place multiple grocery orders in a month but purchase a new phone only occasionally. As online grocery adoption increases, its share of total retail spending can rise even if mobile-phone sales remain substantial.
The decline in mobile phones’ relative importance does not necessarily mean the category is shrinking in absolute terms. Redseer still expects modest full-year growth. Instead, other categories are expanding much faster, changing the composition of the online retail market.
For e-commerce companies, this creates an incentive to broaden their product mix and develop repeat-purchase categories rather than depending too heavily on smartphones and other electronics.
Electronics Sales Rebound, but Growth Could Moderate
While mobile-phone sales remain subdued, the broader electronics category has shown a stronger recovery.
Redseer reported that electronics sales increased 22% year over year in the first half of 2026, reversing a 5% contraction during the corresponding period in 2025.
Several factors contributed to the rebound. These included a reduction in the goods and services tax on large appliances from 28% to 18% in September 2025, aggressive air-conditioner discounts following changes in Bureau of Energy Efficiency star ratings, and an LPG shortage that drove a reported 200%–300% surge in induction cooktop sales.
However, Redseer expects electronics growth to moderate to 12%–15% in the second half of 2026 as some of the factors behind the first-half surge ease.
The distinction between electronics and mobile phones is important. Electronics includes a wider range of products, such as large appliances and household equipment. Growth in these categories can offset weaker smartphone sales and support the overall market.
For online retailers, the challenge will be to maintain this momentum without relying entirely on discounts. Sales promotions can attract customers, but excessive discounting may reduce margins if retailers cannot secure corresponding efficiencies from suppliers and logistics operations.
Festive Shopping Could Support the Market
The festive season is expected to provide another important boost to India’s online retail market.
Redseer estimates that online retail sales during the 30–35 days leading up to Diwali could grow approximately 25% year over year to $15 billion–$16 billion. If achieved, that would represent the strongest festive-season growth in five years.
Grocery, beauty and personal care, home and furniture, and general merchandise are expected to contribute to this momentum. Quick commerce may also capture a larger share of festive spending as consumers use rapid delivery for snacks, household necessities, gifts and other last-minute purchases.
Festive shopping remains highly competitive. E-commerce marketplaces, brand-owned websites, traditional retailers and quick-commerce platforms all compete for consumer spending through promotions, product selection and delivery speed.
The final outcome will depend on the strength of consumer demand, the availability of popular products and the ability of platforms to fulfil orders reliably during periods of heavy traffic.
A strong festive season would support the full-year market forecast, but the results should be assessed against the underlying growth in orders and GMV rather than promotional headlines alone.
Smaller Cities and Younger Consumers Are Expanding the Market
Online retail growth is also spreading beyond India’s largest metropolitan areas. Tier-two cities and smaller urban markets are becoming increasingly important as platforms improve delivery networks, expand regional product selections and adapt marketing to local preferences.
Consumers in these markets can gain access to brands and products that may have limited availability in nearby physical stores. Online platforms also allow shoppers to compare prices across sellers and discover products through digital advertising, social media and creator recommendations.
Younger consumers are another important group. Redseer estimates that Generation Z accounts for around 38%–40% of online retail users and approximately 35% of GMV.
Their influence extends beyond the products they buy. Younger shoppers may discover brands through social media, use digital payment options and expect convenient delivery and straightforward returns. These behaviours encourage retailers to invest in mobile-first shopping experiences and personalised recommendations.
However, adoption patterns vary across regions, income groups and product categories. Retailers still need to account for affordability, trust, payment preferences and reliable fulfilment if they want to reach a broader customer base.
What the $90 Billion Forecast Means for E-commerce Companies
The projected expansion creates opportunities for marketplaces, quick-commerce operators, logistics companies, digital payment providers and consumer brands.
Marketplaces can benefit from a larger pool of online shoppers and higher transaction volumes. Quick-commerce operators can expand into new locations and categories, while logistics providers may see increased demand for warehousing, sorting, delivery and returns management.
Brands can also use online platforms to reach customers beyond their traditional distribution networks. Smaller businesses may find digital marketplaces useful for testing new products and reaching customers in different parts of the country.
Nevertheless, a growing market does not guarantee that every participant will become profitable. Competition for customers can lead to heavy advertising spending, discounts and delivery subsidies. Businesses must therefore balance growth with order economics, inventory efficiency and customer retention.
The shift towards everyday categories also requires different operating capabilities from those needed to sell high-value electronics. Grocery requires frequent replenishment and local availability, while furniture demands careful handling and delivery planning. Companies that adapt their operations to these categories may be better positioned to capture the new demand.
The Bigger Picture
India’s projected $90 billion online retail market reflects a shift in the country’s digital shopping habits. Grocery, beauty and personal care, and home products are becoming major contributors to growth, while mobile phones are losing share because their sales are expanding more slowly. Quick commerce, value-focused platforms and younger shoppers are helping bring more everyday purchases online.
The forecast also shows that market growth is not just about attracting more users. It increasingly depends on order frequency, product selection, delivery infrastructure and the ability to serve customers across different locations and spending levels. For retailers, the opportunity is substantial, but the challenge will be to convert rising GMV into sustainable revenue and profitability.
Looking Ahead
Redseer’s forecast points to a strong second half of 2026, with festive online retail sales expected to rise around 25% year over year. Grocery and other everyday categories will be important indicators of whether the market can maintain its momentum. Retailers will also need to manage inventory, delivery capacity and promotional spending during the Diwali shopping period.
Over the longer term, India’s online retail market could become more diversified as more households purchase groceries, personal care products and home goods online. The pace of growth will depend on consumer purchasing power, digital access, logistics efficiency and the economics of quick commerce. The $90 billion milestone is a forecast, but the first-half results indicate that the composition of India’s e-commerce market is already changing.
Frequently Asked Questions
1. How large is India’s online retail market expected to become in 2026?
Redseer Strategy Consultants projects that India’s online retail market will exceed $90 billion in 2026, growing approximately 22%–24% year over year.
2. Which category is expected to become India’s second-largest online retail segment?
Grocery is expected to overtake mobile phones and become the second-largest online retail category, behind fashion.
3. How quickly is online grocery shopping growing in India?
Redseer forecasts grocery growth of 50%–53% in 2026, with its share of online retail GMV rising from 16% in 2025 to 19%.
4. Why are mobile-phone sales slowing online?
Mobile-phone sales recorded zero year-over-year growth in the first half of 2026. Higher device prices are putting pressure on affordability and encouraging some consumers to delay purchases.
5. What role does quick commerce play in online retail growth?
Quick commerce enables rapid delivery of groceries, household necessities and other products. It encourages repeat purchases and can bring additional everyday spending onto digital platforms, although profitability depends on operating costs and order density.
6. How much could online retail grow during the 2026 festive season?
Redseer expects online retail sales during the 30–35 days before Diwali to grow by approximately 25% year over year to $15 billion–$16 billion.
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