Retail Media on the rise: What’s driving the trend?

The rise of retail media in India is reshaping the digital marketing landscape, driven by technological advancements and changing consumer behaviors.

According to the dentsu-e4m Digital Advertsiing Report 2025, advertising on e-retail platforms reached a market size of Rs 11,293 crore by the end of 2024, accounting for 22.93% of total digital media spends. This reflects a growth rate of 23.43% over 2023, highlighting the rapid ascent and influence of retail media in India's advertising ecosystem.

Interestingly, comparing these figures to the 2024 report, we can see significant growth in retail media. The 2024 report indicated that ad spends on e-retail platforms were Rs 9,149 crores, representing 22.49% of digital media spends. The increase from Rs 9,149 crores to Rs 11,293 crores represents a substantial year-over-year growth, highlighting the rapidly expanding importance of retail media in India's digital advertising landscape.

Russhabh R Thakkar, Founder and CEO of Frodoh, highlights the growing importance of retail media within the programmatic landscape. “As e-commerce and quick commerce continue to reshape consumer behavior in India, retail media is emerging as a powerful tool for brands,” Thakkar notes. He points out that quick commerce platforms are currently dominating this space, with endemic brands seeing tremendous value from targeted, on-site advertising.

The power of retail media lies in its ability to leverage first-party data for highly targeted campaigns. Thakkar explains, “For brands, this means leveraging first-party data to deliver more relevant, timely promotions, with solutions that span across both online and offline channels.” This unified commerce approach ensures seamless, personalized interactions, building customer loyalty while driving sales.

Priyam Dadia, head of media-business development at Schbang, emphasizes the evolving nature of retail media. “Retail media is no longer just about conversions, it's becoming a full-funnel strategy,” Dadia explains. This shift is accompanied by changes in budget allocation, with brands moving from traditional media budgets to commerce budgets to ensure every ad dollar is directly linked to sales.

However, challenges remain, particularly for non-endemic brands. Noting that as of now, these brands must rely on off-site advertising using probabilistic data, which is less precise but still a growing method, Thakkar observes, “There's still a data-sharing challenge when it comes to non-endemic brands that want to advertise to platform audiences. The reluctance of e-commerce giants to share their valuable first-party data limits non-endemic brands' ability to tap into highly targeted advertising opportunities.”

Despite these challenges, the potential for growth in retail media is significant. Thakkar projects that by 2028, retail media could make up 20-25% of India's overall digital ad spend. This aligns with the broader trend of increased digital advertising investment across various sectors.

Indeed, the surge in programmatic advertising is part of a broader digital transformation in India's advertising industry. By the end of 2024, digital media accounted for the largest share of advertising spend at 49%, followed by television at 28% and print at 17%. This shift is expected to accelerate, with digital media projected to contribute 61% of India's total advertising spend by 2026.

The integration of AI-driven automation is set to play a significant role in the future of retail media and unified commerce. Dadia predicts, “AI-led automation will optimize media spends in real-time, aligning ads with inventory, demand, and fulfillment capacity.” This technological advancement is expected to enhance targeting precision and campaign effectiveness.

Tejas Maha, Group Head - Media at White Rivers Media, highlights the broader transformation in India's retail landscape. The distinction between physical stores, e-commerce, and quick commerce is fading, creating a seamless shopping experience where consumers expect consistency across every touchpoint,” Maha notes. This shift towards unified commerce is driving brands to prioritize integration across all channels, enhancing engagement and operational efficiency.

The rise of quick commerce platforms like Blinkit, Swiggy Instamart, and Zepto is further accelerating the adoption of retail media. Multiple experts point out that these platforms are pushing brands to meet consumers at the point of purchase, leveraging precision-targeted advertising within retail ecosystems.

Nitin Kosari, AVP, eMarkets at LS Digital, emphasizes the role of unified commerce in streamlining operations and enhancing consumer experiences. Kosari notes that new-age brands such as Mamaearth, Boat, and Sugar Cosmetics are leveraging unified commerce to sync their own websites, marketplaces, quick commerce platforms, and offline stores. This integration enables efficient inventory and order management, ensuring a frictionless shopping experience.

Looking ahead, the rise of ONDC (Open Network for Digital Commerce) and the proliferation of local marketplaces are expected to drive further adoption of unified platforms. Kosari predicts, “Unified commerce is poised to become the backbone of modern retail, offering brands the agility and intelligence needed to thrive in an evolving digital-first landscape.”

As retail media continues to evolve in India, it's clear that the integration of data-driven strategies, AI-powered automation, and seamless omnichannel experiences will be key to success. Brands that can effectively leverage these tools while navigating the challenges of data sharing and measurement will be well-positioned to capitalize on the growing opportunities in India's dynamic digital advertising ecosystem.