Key facts
- The share of e-commerce in total sales for leading Indian retail chains has grown only 1-2 percentage points in the last four to five years.
- This growth is significantly slower compared to the three to four-fold increase seen during the COVID-19 pandemic in 2020-21 and 2021-22.
- Analysis of eight major retailers, including Reliance Retail, Shoppers Stop, and DMart, reveals minimal improvement in online sales contribution since FY22.
- Retailers are prioritizing profitability and maintaining aligned pricing across online and offline channels, unlike pure-play digital firms.
- Specific examples show Westside's online contribution at 6-7%, Reliance Retail at 17-19%, Bata at 10-12%, DMart at 5-6%, and Shoppers Stop below 1%.
India's leading retail chains have experienced a sluggish increase in the share of e-commerce in their total sales, with contributions either remaining flat or rising by a mere 1-2 percentage points over the past four to five years. This trend persists despite ongoing investments in omnichannel retailing strategies.
An analysis of eight major retailers, including Reliance Retail, Shoppers Stop, Westside, Arvind Fashions, DMart, Spencer's Retail, Pantaloons, and Bata, revealed that the contribution of online sales to overall revenue has seen only marginal improvement since the 2021-22 fiscal year. This is in stark contrast to the period of 2020-21 and 2021-22, when the COVID-19 pandemic spurred a significant surge, causing the share of digital sales to triple or quadruple.
Industry executives attribute this slowdown to several factors. Retailers are making comparatively lower investments in e-commerce compared to pure-play digital companies like Amazon and Flipkart. Furthermore, these traditional retailers have consistently prioritized profitability, ensuring that prices remain largely consistent across both online and offline channels, rather than aggressively pursuing online growth at the expense of margins.
Specific data highlights the varying online contributions. Tata-owned Westside saw its online sales contribution stand at 7% in 2021-22, subsequently remaining around 6% through to 2025-26. Reliance Retail's online share fluctuated between 17% and 19% during the same period, while Bata maintained a 10-12% online contribution. For DMart, e-commerce accounted for 5-6% of sales, and Shoppers Stop's online arm contributed less than 1% to its consolidated revenue between 2021-22 and 2024-25.
Devangshu Dutta, chief executive of consultancy Third Eyesight, noted that the fundamental structure of these retailers is rooted in physical operations, with infrastructure, processes, and systems not inherently designed for the distinct operating model required by e-commerce.