India’s retail industry is witnessing growth despite being heavily unorganised. Around 90% of India’s retail operates in an informal economy.
Factors that drive India’s retail market growth include a steady rise in national wages, the advent of the digital economy and rapid urbanisation. Digitisation is spreading fast with people from both urban and rural centres using mobiles to shop. All that creates the demand to continue expanding the network of supply chain and logistics management.
India’s retail market comprises global e-commerce platforms, multi-retail apps, single-brand shopping websites, and social media sellers. The discretionary spending power continues to rise as the average per capita income stands at approximately US$2,000. The average per capita income is set to surpass US$12,000 by 2047.
India’s retail market has seen the entry of various global retail giants seeing the large portion of middle class and underserved consumer base across non-metropolitan cities. Branded products such as cosmetics, jewellery, apparel, food and beverage, watches and furnishings are becoming increasingly popular among the masses, igniting hopes among retailers involved in selling these products.
In today’s e-commerce era, two popular trends have emerged. Product premiumisation and a continuous drive towards health and sustainability.
Checking Out the Growth Drivers for India’s Retail Industry
The future of India’s retail sounds outstanding with the expanding digital economy and the surging household income, among other encouraging factors. Here’s a list of factors that give businesses the much-needed motivation to tap into India’s retail market.
India Ranks Fourth Among the Largest Retail Destinations Worldwide
India finds itself in fourth place among the largest retail destinations globally, allowing businesses the opportunity to expand their sales networks. Recently, there has been a massive rise in demand for lifestyle and discretionary products. This further resulted in expanding retailers and quick-service restaurant chains across India. During FY 2022-23, retailers added around 4,700 stores to their network. On average, it came out as 13 new stores per day.
India is likely to have seen the addition of 60 shopping malls, occupying 23.25 million square feet of space, in FY 23-24. FMCG, apparel and footwear and consumer electronics segments contribute 65%, 10% and 9%, respectively, to India’s retail market.
According to a research study conducted by Deloitte, India’s online retail market will rise to US$325 billion in 2030 from US$70 billion in 2022. The study pegs the growth of the organised retail market to US$230 billion in 2030. However, the size of the offline retail market is expected to be US$1,605 billion in 2030.
India Ranks Among the Second Largest Internet Market
With over 800 million internet users, India finds itself as the second largest internet market worldwide. The growing adoption of smartphone users has propelled India’s e-commerce market’s growth. Online retail will likely contribute 10.7% to India’s retail market by 2024, rising more than two-fold since 2019.
The expansive online retail ensures businesses have the opportunity to touch upon a significantly large customer base without having to visit extensive physical stores. The gross merchandise value (GMV) of the e-commerce market is estimated to attain a gallant US$350 billion by 2030. Such growth estimates allow businesses to expand and tap into India’s booming retail industry.
The rapid consumption of short videos and social media platforms influence the buying decisions of India’s youth. Around 65% of India’s population remains under 35 years of age. It shows how much retailers can propel using such platforms intelligently.
An Expansive Consumer Spending
Consumer spending is set to go up from the country’s expanding middle class. As per market estimates, consumer spending will likely propel to US$6 trillion by 2030, offering significant growth opportunities for businesses to meet the market demand.
Expanding Logistics and Supply Chain Management
Thanks to the deepening logistics and supply chain management across India, the country’s retail market is witnessing a significant rise, and the momentum is likely to continue going forward. Same-day delivery services have been gaining mainstream focus, boosting retail sales across the country.
Conclusion
India’s retail market presents enormous growth opportunities for businesses with the rise in per capita income, the growing adoption of digital payment services and a host of other encouraging factors. While growth prospects remain strong, the fulfilment of retail business goals depends on a skilled workforce. Contact reBLISS, a popular work platform that connects you with a wide range of skilled professionals for your retail business. Contact Now!
