The Reserve Bank of India (RBI) has highlighted the growing influence of e-commerce and quick commerce in fueling private consumption in India.
In its latest monthly bulletin, the RBI emphasized that these sectors are among the key contributors to the economy’s brighter outlook, noting that they are powering up private consumption.
The central bank also stressed the importance of encouraging competition in these segments, rather than imposing restrictive measures. However, it also observed that the demand for essential household items showed only a modest uptick in the final quarter of 2023.
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The RBI further noted that the urban middle class is hopeful that a reduction in food inflation could boost disposable incomes, enhancing overall spending power. It suggested that a boost to consumption could help reignite economic momentum.
Additionally, the RBI pointed to the continued strength of rural demand, expecting robust growth in that segment. This observation echoes its earlier statement from November, where it recognized rural India as a significant growth area for e-commerce, especially during festive seasons.
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The backdrop of these remarks comes as quick commerce has rapidly emerged as a new battleground in the retail space. Leading platforms such as Zomato’s Blinkit, Swiggy’s Instamart, and Zepto collectively generated over $1 billion in revenue in FY24. Not to be left behind, e-commerce giants Flipkart and Amazon have also entered the quick commerce fray, with companies like JioMart and BigBasket also looking to capture a share of this rapidly expanding market.