Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. Total consumption expenditure is expected to reach nearly US$ 3,600 billion by 2020 from US$ 1,824 billion in 2017. It accounts for over 10% of the country’s gross domestic product (GDP) and around eight% of the employment. India is the world’s fifth-largest global destination in the retail space. India ranked 73 in the United Nations Conference on Trade and Development’s Business-to-Consumer (B2C) E-commerce Index 2019. India is the world’s fifth largest global destination in the retail space and ranked 63 in World Bank’s Doing Business 2019.
India is the world’s fifth largest global destination in the retail space. In FDI Confidence Index, India ranked 16 (after US, Canada, Germany, United Kingdom, China, Japan, France, Australia, Switzerland, and Italy). Retail industry reached US$ 950 billion in 2018 at CAGR of 13% and is expected to reach US$ 1.1 trillion by 2020. Online retail sales were forecast to grow 31% y-o-y to reach US$ 32.70 billion in 2018. Revenue generated from online retail is projected to reach US$ 60 billion by 2020. Revenue of India’s offline retailers, also known as brick and mortar (B&M) retailers, is expected to increase by Rs 10,000–12,000 crore (US$ 1.39–2.77 billion) in FY20. India is expected to become the world’s fastest growing E-commerce market, driven by robust investment in the sector and rapid increase in the number of internet users. Various agencies have high expectations about growth of India’s E-commerce market.
E-commerce is expanding steadily in the country. Customers have the ever-increasing choice of products at the lowest rates. E-commerce is probably creating the biggest revolution in retail industry, and this trend is likely to continue in the years to come. Retailers should leverage digital retail channels (E-commerce), which would enable them to spend less money on real estate while reaching out to more customers in tier II and tier III cities. It is projected that by 2021, traditional retail will hold a major share of 75%, organised retail share will reach 18% and E-commerce retail share will reach 7% of the total retail market.
Nevertheless, long-term outlook for the industry looks positive, supported by rising income, favourable demographics, entry of foreign players, and increasing urbanisation.