digital ads: e-commerce platforms provide an $8 billion market for digital ads in India

New Delhi: E-commerce platforms are now the fastest growing digital advertising medium in India, with an opportunity of $6 billion to $8 billion by 2030, according to a new report.

Product e-commerce user base growth is expected to outpace that of search and social media platforms, with 300-350 million new online shoppers from Tier 2 marketplaces expected by 2030.

India’s digital advertising market is expected to hit $35 billion over the same period and e-commerce platforms will be a major contributor to this upward spiral, according to local strategy consultancy Redseer.

The total advertising market in India stood at $11 billion in 2021, of which 37% comprised the digital advertising market.

“The fact that Millennials and Gen Z are spending so much time on digital platforms is contributing to the growth of the ad tech market. This is expected to continue as more and more people use websites, apps and social media to interact with each other,” Sanjay said. Kothari, Associate Partner, ARedseer Strategy Consultants.

The contribution of e-commerce platforms to the adtech industry has rapidly increased from 15% to 20% over the past two years, and will contribute between 20-25% of the market share.

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The product e-commerce advertising market is dominated by online marketplaces Flipkart and Amazon with a 75% share.

The overall advertising market, which includes traditional and digital ads, is poised to hit $45-50 billion by 2030, 70-75% of which will be digital ads.

A drastic increase in digital consumption along with digital penetration in Tier 2 cities are the major growth drivers responsible for the surge in the digital advertising ecosystem in India.

“In addition, an increase in GDP per capita and the rise of D2C (direct-to-consumer) challenger brands are other key drivers of this growth,” the report notes.

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