The retail industry in India has started to recover from the pandemic, and is expected to grow at an annual rate of 10 percent, reaching approximately USD 2 trillion by 2032, according to a report by Boston Consulting Group (BCG) and Retailers Association of India (RAI). While certain industry segments, such as food and grocery, restaurants and quick service restaurants (QSRs), and consumer durables, have already recovered to pre-COVID levels, others like jewellery and accessory, apparel, and footwear are expected to make a full recovery soon.
According to Abheek Singhi, Managing Director and Senior Partner at BCG, “The Indian economy continues to be driven by consumption and we are observing that consumption growth is back in the positive territory after the two-year COVID pause.” Singhi believes that India’s retail industry will grow to approximately USD 2 trillion in the next 10 years, with organised retailers focusing on footprint expansion across all formats, offline and online, to fuel future growth.
Before the pandemic, India’s consumption was growing at approximately 12 percent, but it went into negative territory during the pandemic. However, it has now recovered to surpass pre-pandemic growth levels at 17 percent. The report predicts that e-commerce in the country will reach USD 130 billion by 2026, compared to USD 45 billion in 2021.
Rachit Mathur, Managing Director and Partner of Consumer & Retail Practice at BCG, noted that rising competition and the need for constantly improving customer value proposition are driving the rise of ecosystems. Customers are being approached by players across retail and non-retail, and this trend is expected to significantly transform the entire landscape in the future.
The report by BCG-RAI is an in-depth study of retail players in the country, identifying challenges in the prevailing environment and highlighting emerging trends and models that can potentially shape the future of retail. As India’s retail industry is poised for growth in the next decade, it is crucial for retailers to stay ahead of the curve and adapt to the changing trends and customer demands.
One emerging trend in the retail industry is the rise of omnichannel retailing, where customers can shop seamlessly across online and offline channels. This trend is expected to become even more prevalent in the future, as customers demand a convenient, personalised, and frictionless shopping experience.
Another trend highlighted in the report is the growing importance of sustainability in the retail industry. Customers are becoming increasingly conscious of the impact of their consumption on the environment, and are looking for sustainable products and brands. Retailers need to respond to this demand by adopting sustainable practices and offering eco-friendly products.
The report also identifies the need for retailers to embrace technology and data analytics to improve their operations and customer experience. For example, retailers can use data analytics to understand customer preferences and behaviour, and offer personalised recommendations and promotions.
In conclusion, the retail industry in India is poised for growth in the next decade, and retailers need to adapt to the changing trends and demands of customers. As the industry recovers from the pandemic, retailers need to focus on expanding their footprint, embracing omnichannel retailing, adopting sustainable practices, and leveraging technology and data analytics to improve their operations and customer experience. By doing so, retailers can position themselves for success in the future.
