Despite the weak consumer activity currently, the Indian retail market is poised to see a positive growth on the back of digital trend.
The Boston Consulting Group (BCG) and Retailers Association of India (RAI) released a joint study titled ‘Retail 4.0: Winning the 20s’ on retail market growth and trends.
The study estimates the Indian retail market to reach USD 1.3 trillion by 2025, supported by social, structural and economic drivers.
The market value was USD 0.7 trillion in 2019.
“India’s long-term consumption and retail growth drivers are expected to provide a strong foundation for future growth. Indian retail market is estimated to reach USD 1.1-1.3 trillion mark by 2025, reporting a CAGR of 9-11 per cent from 2019,” reads the study finding.
Data and technology disruptions, along with supply side innovations, will shape the future of the Indian retail landscape.
It’s imperative for retail businesses to embrace data and technology to meet the consumer demands.
Besides, an equal emphasis on innovation is also key for the businesses in fighting out rising margin pressures, costs and gain a competitive edge in the coming decade, the study noted.
“Winning in the 20s will require retailers to rethink their value proposition and operating model. Precipitating and participating in ecosystems will be a key driver of success,” says Abheek Singhi, Managing Director and Senior Partner, BCG.
The study further added that the ecommerce industry has grown with diverse channels making their presence on par with leading players.
“Most significantly, small neighborhood stores have adapted well to the new reality, amidst competition from e-commerce and modern trade,” the study noted.
It said, in future, customer preferences will be more on trust, omni-presence and personalization.
According to Indian Brand Equity Foundation (IBEF), the market will reach an estimated USD 1.1 trillion in 2020.