India’s e-retail market will grow seven times to touch $300 billion over the next decade. The next phase of expansion will be led by e-grocery and the smaller towns, analysts at JP Morgan said in a report.

According to Euromonitor, the country’s e-commerce market has grown 13 times over 2014-21 to $41 billion with 6.5 per cent penetration.

“India e-tail penetration is at the lower end of its emerging market and developed peers. This provides ample opportunity to grow at a rapid pace. Indian e-tail growth was held back by lack of online shoppers in tier-II and tier-III cities as the market was dominated by saturated metro/tier-I city users,” the JP Morgan report said.

The e-grocery segment could be another area contributing to its growth. Grocery is the largest category in the country’s retail market at $410 billion in 2020 and has the lowest online penetration at only 0.9 per cent.

The low penetration provides the platform to become the fastest growing segment over the next 10 years, the analysts said.

Covid-19 has only led to more online buying of groceries as the shoppers were unable to step out of their homes because of lockdowns. The trend continued throughout the last year, and shoppers now are comfortable with online purchases.

The brokerage expects e-grocery to grow 28 times to $96 billion over the next decade.