The fast-moving consumer goods market in India is booming, and the sinking market has become a new opportunity for sellers.
“There are huge opportunities in the sinking market of the Indian e-commerce industry.”
Produced by | Cross-border Dark Horse Author | Xu Xiaoyu
01 New Business Opportunities Emerge in the Indian E-commerce Market
In recent years, the fast-moving consumer goods (FMCG) industry in India has shown a booming development trend, which has also opened up a new blue ocean full of opportunities for cross-border e-commerce sellers.
Recently, the data analysis company NielsenIQ released a report showing that in the second quarter of 2025, the sales of the Indian fast-moving consumer goods (FMCG) industry increased by 13.9% compared with the second quarter of 2024, and e-commerce is becoming a key growth engine.
The sales of Indian FMCG have increased. Source: businessline
In detail, the report shows that the overall market sales volume increased by 6% this quarter, and the price increased by 7.4%. In terms of channel performance, e-commerce continued to maintain an upward trend and surpassed modern trade (MT, including shopping malls and large supermarkets) in eight major metropolitan areas. Among them, the southern metropolitan areas led in e-commerce penetration, with a market share of 18.4%.
It is worth noting that the sales growth rate in rural areas of India has exceeded that in urban areas for six consecutive quarters. The growth rate in rural areas reached 8.4%, while that in urban areas was only 4.6%.
Rural demand supports the growth of FMCG. Source: nielseniq
In recent years, the Indian e-commerce market has shown strong strength. Not only has the number of online shoppers increased explosively, but the per capita online shopping expenditure has also increased significantly.
Data shows that it is estimated that 33% of Internet users in India will shop online in 2025, and the number of online shoppers in India is expected to increase to 350 million to 400 million. Among them, fashion and clothing are expected to be the category with the highest online spending, accounting for 25% of online retail spending. Although the share of electronic products has decreased, it will still account for about 23% of the market share. The growth of food and FMCG is also very remarkable, and it is expected to account for 16% of online retail spending.
As early as March this year, Redseer released a report showing that the scale of the Indian e-commerce market is expected to reach $162 billion in the fiscal year 2029, an increase of nearly $100 billion compared with $64 billion in the fiscal year 2024. It will become the world's third-largest e-commerce market after China and the United States.
The Indian e-commerce market is growing rapidly. Source: financialexpress
At the same time, the Redseer report also pointed out that second-tier and lower-tier cities in India are becoming the core driving force for e-commerce growth. It is expected that by the fiscal year 2029, second-tier and lower-tier cities will contribute nearly 65% of e-commerce orders.
02 The Overseas Sinking Market is Booming
From the perspective of consumer demand, against the background of global economic fluctuations, overseas consumers are making more cautious shopping decisions and are more sensitive to commodity prices. "Cost-effectiveness" has become the core consideration for most people when consuming. At this time, consumers in the sinking market have a more prominent pursuit of cost-effectiveness. This group, which was originally more sensitive to prices, has had its demand for low prices further activated.
From the perspective of market supply, enterprises' responses to the trend of "consumers choosing cheap goods" have become the catalyst for the explosion of the sinking market. Platforms represented by Temu and Amazon's low-price mall have launched low-price products through supply chain optimization and turned their attention to the sinking market where the consumption potential has not been fully tapped, further filling the supply gap in the sinking market.
Market data clearly confirms this change. According to the data of Apple's annual list, Temu was the most popular free app in the United States in 2024. And the platform's popularity remains high. According to the report in the second quarter of this year, Temu's cumulative downloads have successfully exceeded the 1 billion mark.
Temu's downloads exceeded 1 billion in the second quarter of 2025. Source: investing
Amazon is also constantly making efforts in the sinking market. Recently, Amazon Mexico also launched a low-price store, Amazon Bazaar, in its mobile app, aiming to provide low-price fashion, lifestyle, and practical products to attract more price-sensitive consumers and increase user stickiness and repurchase rate.
It should also be noted that the consumption structure, which was mainly based on low-price daily necessities in the past, is changing. High-unit-price categories such as electronic products and household appliances are gradually penetrating the sinking market.
Taking the data during Amazon's Great Indian Festival in 2024 as an example, more than 4 million new customers shopped on Amazon for the first time. More than 80% of these new customers were from second-tier or lower-tier cities. In popular categories such as smartphones, consumer electronics, and beauty products, the number of orders from second- and third-tier cities also increased significantly.
Temu's downloads exceeded 1 billion in the second quarter of 2025. Source: investing
The sales situation of each category. Source: Amazon official website. Of course, cross-border e-commerce platforms also face many challenges when entering the sinking market, and logistics and distribution are the primary problem. In other words, the explosion of the sinking market is not only a blue ocean full of opportunities but also a market touchstone to test strength. If you want to better capture the sinking market, rural areas, etc., you need to continuously improve the infrastructure and bear high logistics costs.
Generally speaking, the rapid development of the sinking market is undoubtedly a positive signal. If cross-border merchants can effectively avoid potential risks at the operational level and rely on China's strong supply chain advantages and digital operation capabilities, they will have the opportunity to gain a foothold in this growing fertile ground.
This article is from the WeChat official account "Cross-border Dark Horse". Author: Xu Xiaoyu. Published with permission from Qiantang.
