India’s e-commerce market is projected to nearly double to $180–200 billion by 2030 from about $70–80 billion in 2024, with micro, small and medium enterprises (MSMEs) and direct-to-consumer (D2C) channels driving a significant share of the growth, according to a report by McKinsey & Company. 

In its latest report, The great unbundling of Indian e-commerce: MSMEs and the direct-to-consumer revolution, McKinsey said nearly half of the incremental gross merchandise value (GMV) by 2030 is expected to come from MSMEs operating outside traditional marketplace channels, reshaping India’s online retail landscape. 

While large marketplaces will continue to account for about half of the projected market size, the rest of the growth is expected to be led by D2C brands and quick commerce platforms that highlights speed, convenience, and direct consumer engagement. 

D2C to grow three times faster than marketplaces 

According to the report, D2C sales—currently estimated at $10–12 billion—are projected to rise five-fold to $55–60 billion by 2030, implying a compound annual growth rate (CAGR) of 38%. 

A survey of more than 1,000 Indian MSMEs found that 53% now prefer selling directly to consumers through their own websites or social media platforms, compared to 47% who primarily rely on marketplaces. For many MSMEs, D2C offers lower platform fees, better access to first-party customer data, improved margins and greater flexibility in branding. 

“India is entering a new phase of e-commerce expansion where both demand and supply are less concentrated,” said Neelesh Mundra, Senior Partner at McKinsey & Company. He said D2C channels are expected to represent $55–60 billion of e-commerce trade by 2030, up from $10–12 billion today. 

Quick commerce to touch $40 billion 

Quick commerce is also expected to see rapid expansion, with the segment projected to reach $35–40 billion by 2030, growing at a CAGR of 45%. 

The growth will be supported by wider product assortments, faster delivery timelines, just-in-time fulfilment models and increasing internet penetration across Indian metros, the report said. 

Social commerce is emerging as a key catalyst for MSME-led growth. Platforms such as Instagram and Facebook are increasingly outpacing search engines and marketplaces as primary discovery channels for MSME brands. 

From influencer-led marketing to in-app checkout options, social commerce is playing a growing role in shaping purchase decisions, particularly among consumers in Tier-2 and Tier-3 cities seeking localised and trust-based engagement. 

Tier-2, Tier-3 cities to power growth 

The report highlights a structural shift in the geography of e-commerce demand. Tier-2 and Tier-3 cities already account for over 60% of total e-commerce shipments, driven by wider internet access, rising incomes and increasing digital payment adoption. 

India’s e-commerce penetration remains relatively low at 6–8%, compared with 23–25% in the US and 25–27% in China, indicating significant headroom for growth. 

By 2030, India could add over 140 million households earning more than $10,000 annually, substantially expanding the addressable market for online businesses, the report said. 

McKinsey also noted the next phase of India’s e-commerce growth will be defined by millions of small businesses across cities and towns leveraging D2C models, social commerce and digital infrastructure to directly access customers in India and beyond.