India is witnessing a tectonic shift in retail consumption towards lower tier cities for a post-pandemic era with increased digital adoption, according to industry experts on Wednesday.

Speaking at the inaugural session of Phygital Retail Convention, Anurag Mathur, partner and leader at Consumer and Retail Business, Strategy&, part of the PwC network, said, "B2B (Business-to-Business) ecommerce players such as Udaan & ShopX are betting on these lower tier cities accounting for 60 percent of retail spend."

Online fashion sales reported triple digit growth from tier 2 and 3 cities vis-a-vis less than 20 percent in metros, Mathur said.

These tier 2 and 3 cities also attracted five times more investments in retail infrastructure compared to metro cities, he said.

By 2025, India's online retail sales are estimated to rise to 104 billion U.S. dollars from 37 billion U.S. dollars in the year 2020 with the social commerce pie within it rising to 18 billion U.S. dollars from 2 billion U.S. dollars, respectively, Mathur said.

Moreover, the significance of social commerce can be gauged from the fact that the total investment in social commerce in 2021 hit an overwhelming 882 million U.S. dollars, he said.

Concerning the digital trend, Damodar Mall, president and CEO of the grocery retail business at Reliance Retail pointed out that over half of their stores are based in small towns and around 60 percent of the total orders of its grocery app were placed by people from tier 2 and 3 cities in India.

Experts at the convention noted that the COVID-19 crisis has pushed malls to be innovative and opt for e-commerce and this will shrink time to value cycles with rapid digital adoption.