India’s retail media market to reach $8.1 billion by 2031: Report

MUMBAI: The next advertising gold rush may begin not with a TV commercial, but with a shopping cart. India’s retail media market is projected to surge to $8.1 billion by 2031, emerging as one of the country’s fastest-growing advertising segments as brands increasingly prioritise platforms that can turn clicks into checkouts, according to a new report by Media Partners Asia (MPA).

The report estimates that retail media covering advertising across e-commerce marketplaces, quick commerce platforms and other commerce-led digital channels will account for around one-third of India’s media and entertainment (M&E) advertising market by the end of the decade.

The findings highlight a dramatic reshaping of India’s advertising landscape. While the country’s advertising market has doubled from $8 billion to $16 billion since the pandemic, marketers are increasingly diverting budgets away from traditional video advertising towards formats that deliver measurable sales outcomes.

According to MPA, more than 70 per cent of incremental advertising spend over the past five years has flowed into non-video digital formats, including search, display and retail media. Retail media alone has expanded almost tenfold, growing from $300 million in 2020 to $3.1 billion in 2025. It now accounts for around 30 per cent of digital advertising and 20 per cent of total M&E advertising spend in India.

Meanwhile, video advertising has steadily lost ground. Its share of the advertising market has declined from 45 per cent to 37 per cent, weighed down by three consecutive years of decline in linear television. Premium video’s share has almost halved, slipping from 39 per cent in 2019 to 20 per cent in 2025, despite revenues remaining broadly stable at around $3.2 billion. MPA expects that share to ease further to 18 per cent in 2026.

The report attributes retail media’s rapid rise to the continued expansion of India’s digital commerce ecosystem. The country’s online shopper base has more than doubled to 300 million, although that still represents only about one-third of the connected population. MPA forecasts the number will climb to 500 million by 2030.

At the same time, India’s e-commerce gross merchandise value (GMV) has tripled to nearly $75 billion, yet still accounts for only about 3 per cent of the country’s consumption GDP, indicating considerable room for future growth.

Advertising is also becoming an increasingly important revenue stream for commerce platforms. According to the report, advertising now contributes 8-9 per cent of GMV for leading e-commerce companies as they seek alternative profit engines amid intense competition and limited success of paid loyalty programmes.

Among digital commerce formats, quick commerce is expected to lead the next growth wave. MPA estimates the segment already attracts around $500 million in advertising spend and could account for more than 26 per cent of India’s retail media advertising market by 2031, driven largely by FMCG brands shifting budgets towards platforms that directly influence purchase decisions.

The report also points to artificial intelligence as a key differentiator. Retailers are investing in AI-powered analytics and measurement tools that enable advertisers to link campaigns directly to conversions and return on ad spend (ROAS), strengthening retail media’s appeal over traditional advertising channels.

For premium video platforms, the shift presents a growing challenge. MPA argues that while social media platforms have embraced AI-driven shoppable advertising, streaming services and other premium publishers will need to develop similar commerce capabilities if they are to defend advertising budgets increasingly driven by measurable business outcomes.