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E-commerce Platforms Provides an $8 BN Market for Digital Ads in India


E-commerce platforms are now the fastest growing medium for digital ads in India, with a $6-8 billion opportunity by 2030. The growth in product e-commerce user base is expected to be faster than search and social media platforms, with 300-350 million new online shoppers from Tier-II markets expected by 2030.

India’s digital ads market is expected to touch $35 billion in the same time period and e-commerce platforms will be one of the biggest contributors enabling this upward spiral, according to homegrown strategy consulting firm Redseer.

The total advertising market in India stood at $11 billion in 2021, out of which 37 percent comprised the digital ads market.

“The fact that millennials and Gen Z spend so much time on digital platforms is helping in the growth of the ad tech market. This is likely to continue as more people use websites, apps, and social media to engage with each other,” said Sanjay Kothari, Associate Partner, Redseer Strategy Consultants.

The contribution of e-commerce platforms to the ad tech industry has rapidly increased from 15 percent to 20 percent in the last two years and contributes between 20-25 percent of the market share.

The product e-commerce-driven ads market is dominated by online marketplaces Flipkart and Amazon with a 75 percent share.

The overall advertising market, which includes traditional and digital ads, is poised to touch $45-50 billion by 2030, out of which a staggering 70-75 percent will comprise digital ads.

A drastic increase in digital consumption, as well as digital penetration in Tier-II cities, are the primary growth drivers responsible for the spike in India’s digital advertising ecosystem.

“Additionally, an increase in GDP per capita and the rise of D2C (direct to consumer) challenger brands are the other key enablers of this growth,” the report further added.
 

READ MORE: Engagement to Experience: E-commerce Redefined in the Coming Years



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