Retail Industry in India 2023

Retail Industry in India 2023

Market insights:

The Indian retail industry is a key driver of the Indian economy. India’s retail industry is projected to grow quickly owing to factors such as increasing urbanization, rising household income, connected rural consumers, and increasing consumer spending. The retail industry was valued at INR 62.90 Tn in FY 2022 and is expected to reach INR 120.59 Tn by FY 2027 at a compound annual growth rate (CAGR) of 14.22%. Clothing, textiles, fashion accessories, jewelry, watches, footwear, health and beauty products, pharmaceuticals, consumer durables, home appliances, cell phones, furnishings, utensils, furniture, food, grocery, catering, books, music, gifts, and entertainment are among the major segments of the Indian retail sector.

Market segment:

The retail industry includes segments like - Food & Grocery, Jewelry, Apparel, Furniture, Pharmacy, Mobile, Consumer Durables, Beauty & Personal care, Footwear, and others. The Food & Grocery segment held the largest market share of the Indian retail industry with 61.67% in FY 2022, which is estimated to reach ~58.90% by FY 2027. The Jewelry market holds the second position with 8.25% in FY 2022. The apparel market is likely to grow from 7.24% market share in FY 2022 to 8.13% in FY 2027 due to increase in disposable income.

Impact of COVID-19:

The pandemic has caused delays in the implementation of new big data technologies and tools, further slowing down the market's growth. In order to forecast the development of the coronavirus sickness and its risks, data analysts from hospitals in India and around the world succeeded to collect information on patient travel and hospital data. With the shift towards remote work, there has been an increased need for cloud-based big data solutions, creating opportunities for cloud service providers in the Indian market.

Market Influencers:

Market drivers:

Disposable income refers to the money that remains after paying taxes and essential expenses such as rent, utilities, and groceries. In India, the growth of disposable income has played a significant role in boosting the retail market. With rising disposable income, Indian consumers have more money to spend on discretionary purchases such as clothing, electronics, and home furnishings. As a result, the demand for these products has increased, leading to the growth of the retail market. Consumers are looking for more than just a transaction when they go shopping. They want an experience, whether that's through personalized service, interactive displays, or other innovative approaches. This has led to the growth of experiential retail, where the shopping experience is as important as the products being sold.

Key deterrents to the growth of the market:

The retail industry is facing significant challenges due to the increasing cost factor associated with the large supply chain. A supply chain refers to the network of suppliers, manufacturers, and retailers involved in the production and distribution of a product. As the retail industry expands globally, the supply chain becomes more extensive, making it difficult to manage and control costs. Most consumers still like to analyze and compare products by going to an exclusive brand outlet (EBO) or a multi-brand outlet (MBO). Customers typically visit any physical store before making a final purchase since live demonstrations, in-person product viewing, handling, and experience are crucial and impactful at the time of purchase.