India's $3 Sari: E-commerce Reshapes Local Markets

India's traditional street markets are experiencing a significant shift as the internet revolutionizes retail. Falling data prices and enhanced logistics have propelled e-commerce platforms, with Meesho notably expanding its reach to 199 million buyers since 2020. This digital migration is pulling the majority of India's informal retail sector into the formal economy, projected to decrease from 85% to around 66-68% by 2030.

The expansion of online marketplaces like Meesho provides vendors with access to a nationwide customer base, a stark contrast to their previous neighborhood-bound operations. While major platforms like Amazon and Myntra focus on larger cities, Meesho's low-cost model, which charges for delivery and advertising rather than commissions, directly competes with street vendors, offering items like saris for as little as 266 rupees, including delivery.

Improved delivery networks, including those from startups like Delhivery, have made e-commerce viable even in India's most remote locations, with 90% of Meesho's shoppers residing outside the eight largest cities. This surge in accessibility is not only transforming consumption patterns but also elevating aspirations, making trends from major urban centers available almost instantly in smaller towns, bridging the gap between urban and rural lifestyles.