E-comm ad revenue to hit Rs 30,000 crore in the next 3-4 years: Ashish Pherwani

In the ‘Kickstarting the economy through advertising’ session, Ashish Pherwani, Leader – India for Media & Entertainment, EY spoke about the co-relation of advertising and India’s economy. He highlighted how increased advertising spends drives consumer demand, boosts business revenues, and contributes to overall economic growth.

“Any year the economic growth is sub 6%, the advertising growth will be lower. Whenever the economic growth is above 6%, you would see it on the line or above,” he explained, adding that the continuous growth of 6.5% is expected to be maintained over the next year or so. He then delved into the positives and negatives that would define the growth of the economy and advertising in 2025.

It’s a consumption-oriented budget that would allow for about Rs 80,000 crore to Rs 1 lakh crore in savings. “Even if 60 to 70% of it goes into consumption, it should be a positive,” he said. Further, he spoke about the credit guarantee being doubled from Rs 5 crore to Rs 10 crore — calling it the absolute ‘Brahmastra’ over the next 2 to 3 years.

“I have spoken to a couple of CEOs in the banking sector and most of them are saying this is our big focus for 2025-2026 — just grow credit to the MSME sector,” he explained. Further, India is expected to hit a per capita income of 3000 USD by the end of 2025, leading to a ‘hockey stick effect’ on consumption.

Another key factor driving the economic growth is an increase in the female labour force, from 33% in FY 22 to 42% in FY 24. “We expect this to give rise to a whole new class of consumers who have control over their spending power, a little more than before,” Pherwani explained.

The gap between rural and urban spending, which was 84% in FY 12 has come down to 70% now — which is still a very big gap but the number between the per capita expenditure of the two markets is continuously coming down.

He further spoke about e-commerce ad revenue: “Our estimate is that in 2024, ad spends going to e-commerce platforms grew
by more than 70% from 2023. We expect this number to cross Rs 30,000 Crore in the next 3 to 4 years.”

Govt. Capex is expected to keep growing. Further, affluent households in India have now hit 50 million, growing at 3-4% CAGR. He then explained the risks to the growth of advertising: War in the global landscape, increase in crude prices, exchange rates and inflation, application of tariffs, reported unemployment of 5%, the question of whether India will be a favoured destination for FDI in 2025 and dependence on agriculture driving low GVA.

Pherwani concluded with an estimate that advertising could grow by 7-8% in 2025.

To download the full Pitch Madison Advertising Report 2025, click here:
https://e4mevents.com/pitch-madison-advertising-report-2025/download-report#downloadReport