RETAIL SECTOR OVERVIEW
Statistics, news & updates: everything you need to know about the Retail Industry in India
Summary/Snapshot
Retail Industry
Retail Market Size:
India now has the world’s fifth-largest retail market.
The Indian retail industry is projected to grow to $1.8 trillion by 2030, up from $1.01 trillion in 2024.Big Bazaar Instant Home Delivery:
Big Bazaar’s 2-hour delivery service, launched in March 2021, has expanded beyond Delhi NCR, Mumbai, and Bengaluru. It now covers 21 cities and aims to reach 150 cities.Omni-channel Retailing:
Many Indian retailers continue to adopt and refine their omni-channel strategies. Companies like Croma, Reliance Retail Ventures, Aditya Birla Fashion and Retail Limited, and OnePlus remain at the forefront
- In FY24, the retail sector contributed $1.01 trillion to India’s GDP and now employs 46 million people, which is still about 8% of the country’s workforce.
- Hyper-personalization models based on behavioral data, brand performance, demographics etc. are used by Indian merchants to increase sales.
- Acceptance and usage of E-retailers by consumers is growing as a result of ease and secure financial transactions and the pandemic.
- Major retail segments are fast-moving consumer goods (FMCG), clothes & footwear, and consumer electronics, which account for 65 per cent, 10%, and 9% of the market, respectively.
Growth Drivers
- Food products manufactured in India and in single-brand retail allow 100% FDI is authorized via the automatic route.
- To encourage E-retailing in consumer durables, the online retail segment offers cash-on-delivery and manufacturer’s warranty. Cash-on-delivery is the favored payment method in India, with over 30% of buyers choosing it.
- Significant growth in surplus money and changing lifestyles are the two main factors in Indian retail. India will add 140 million middle-income and 21 million high-income families by 2030.
Sub industries
- Apparel
- Fashion Accessories
- Food & Beverage
- Footwear
- Furniture & Furnishing
- Kitchenware & Tableware
- School & Office Supplies
Opportunities
- According to recent reports, India’s luxury market is projected to reach US$ 17.67 billion in 2024. This growth is driven by increased exposure to international brands among Indian youth and the higher spending power of the upper class in tier II and III cities.
- Global retailers such as Walmart, Tesco, and Marks & Spencer are significantly boosting their sourcing from India by establishing their own wholly-owned/wholly-managed sourcing and buying offices. This trend reflects a strategic shift towards more direct control over their supply chains.
- In 2024, the retail sector in India has attracted US$ 2 billion in venture capital funding in the first quarter alone. This indicates a strong revival and growing investor confidence in the sector.
Challenges
- The retail industry’s biggest problem is attracting and keeping customers.
- The retailers are not in direct contact with farmers, producers, or manufacturers. Retailers then seek the services of middlemen, which expands the supply chain and raises the price of the final product.
- For a long time, India’s retail industry has remained disorganized. There are no standard procedures or plans that can help a retailer start and run a store.
- High maintenance expenses, the growth of E-commerce, and changing customer expectations are among the key issues facing the retail industry.
Key Investment Opportunities
- The government’s focus is on supply chain-related infrastructures such as cold storage, abattoirs, and food parks, and this segment provides investment potential in food processing infrastructure.
- Food parks provide a unique opportunity for businesses, including foreign investors, to enter India’s food processing industry.
- For 728 districts across the country, the One District One Focus Product (ODOFP) programme covers agriculture and associated products.
- Fabric processing equipment is available for a wide range of natural, synthetic, and speciality fabrics.
- There are numerous opportunities to invest in retail brands.
Recent Developments
- Retail Tech Companies: Retail tech companies in India continue to thrive, offering services such as digital ledgers, inventory management, payment solutions, and logistics tools. In the first half of 2024, investors have poured US$ 1.2 billion into over 250 small and mid-sized retail technology companies, marking a significant increase from previous years.
- E-commerce Growth: Retailers are increasingly leveraging digital retail channels to reach more customers, especially in tier II and III cities. The online retail market in India is projected to reach US$ 200 billion by 2026, driven by the rising number of online shoppers.
- Consumer Economy: India is on track to become the world’s third-largest consumer economy, with consumption expected to reach US$ 500 billion by 2025. Factors such as healthy economic growth, a changing demographic profile, increasing disposable income, urbanization, and evolving consumer preferences are driving this growth.
Key Players in India
National
- Rallis India Limited
- Nuziveedu seeds limited
- Advanta Limited
- Poabs Organic Estates
- National Agro Industries
- Godrej Agrovet Limited
- Rasi Seeds
- Jain Irrigation Systems
International
- BASF
- Bayer AG
- CNH Industrial
- DowDuPont
- Syngenta AG
- Cargill
- CLAAS
- Deere & Company
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