India's Retail Media Market to Hit $8.1 Billion by 2031: Report

India's retail media market is set to reach $8.1 billion by 2031, emerging as one of the country's fastest-growing advertising segments and reshaping how brands allocate marketing budgets, according to a new report by Media Partners Asia (MPA).

The report estimates that retail media - which includes advertising on 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 2031, underscoring a broader shift in the country's advertising ecosystem.

Digital Formats Outpace Video Advertising

India's overall advertising market has doubled from $8 billion to $16 billion since the pandemic, but video's share of advertising has slipped as marketers increasingly prioritise platforms that can directly link advertising to purchases. According to MPA, more than 70% of incremental ad spend over the past five years flowed into non-video digital formats such as search, display, and retail media.

Retail Media's Nearly Tenfold Growth

Retail media alone expanded nearly tenfold, growing from $300 million in 2020 to $3.1 billion in 2025, and now accounts for roughly 30% of digital advertising and 20% of total M&E advertising spend in India. In contrast, video's share of advertising has declined from 45% to 37%, weighed down by three consecutive years of decline in linear television. Premium video's share of M&E advertising has nearly halved - from 39% in 2019 to 20% in 2025 - despite revenues staying broadly flat around $3.2 billion. MPA expects this share to fall further to 18% in 2026.

What's Fuelling the Growth

The report attributes retail media's rapid rise to the expansion of India's online shopping ecosystem. The country's online shopper base has more than doubled to 300 million users, though that's still only a third of the connected population; MPA forecasts it will reach 500 million by 2030. Meanwhile, e-commerce gross merchandise value (GMV) has tripled to nearly $75 billion, though it still represents only about 3% of India's consumption GDP - suggesting significant headroom for future growth.

Advertising has become a critical profit engine for digital commerce platforms as competition intensifies and paid loyalty programmes struggle to gain widespread adoption. Per the report, advertising now contributes 8-9% of GMV for leading e-commerce platforms and is becoming an increasingly important source of profitability.

Quick Commerce: The Fastest-Growing Segment

Quick commerce is expected to be the fastest-growing segment within retail media. The report estimates the category already attracts around $500 million in advertising spend and will account for more than 26% of retail media advertising by 2031, as FMCG brands increasingly shift budgets toward platforms capable of closing the purchase loop.

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AI-Driven Measurement Gives Retail Media an Edge

MPA also noted that retailers are investing heavily in AI-enabled analytics and measurement tools, allowing advertisers to directly connect ad exposure with conversions and return on ad spend (ROAS) - creating a competitive advantage over traditional media channels.

A Wake-Up Call for Premium Video

The report argues that the rise of retail media presents an urgent challenge for premium video platforms. While social media companies have already introduced AI-powered shoppable advertising formats, streaming services and other premium video publishers will need to develop similar commerce capabilities if they hope to retain advertising budgets that are increasingly driven by measurable business outcomes.