India’s retail sector is projected to grow to $1.3 trillion by 2020 from the level of $672 billion in 2017, Anarock Retail report on India’s offline and online retail market stated.
“India’s retail sector is on a faster roll than ever before and the boosters acting on the retail sector are rapid urbanisation and digitisation, rising disposable incomes and lifestyle changes, particularly that of the middle-class,” explained Anuj Kejriwal, Managing Director and CEO, Anarock Retail.
Anarock retail in its study about online retail said space will jump at four times to $73 billion by 2022 from an estimated $17.8 billion in 2017. The offline retail sector meanwhile is projected to grow from $672 billion in 2017 to $1.3 trillion in 2020.
Combining $1.3 trillion (value of offline retail by 2020) and $73 billion (size of online retail in 2022) suggests that the two sectors will at least contribute $1.99 trillion by 2022.
“The Indian retail sector is on a faster roll than ever before. Rapid urbanisation and digitisation, rising disposable incomes and lifestyle changes – particularly of the middle-class – are acting as booster rockets for the Indian retail sector,” Anuj further stated.
Anarock retail in a report said that the retail sector attracted $147.4 million during last fiscal as against $104.34 million in the previous year.
According to the report, the Indian retail market has evolved from traditional shops to multi-format stores and malls and the highly tech-driven e-commerce model.
Factors such as the availability of cheaper handsets and data plans are factors for a rapid growth of e-commerce models.
“India is today one of the fastest growing e-commerce markets worldwide, with millions of new internet users taking advantage of cheap smartphones and high-speed data…In fact, e-commerce in India is growing faster than in other countries like Australia, Japan, China and South Korea,” Kejriwal said.
Options such as cash-on-delivery and manufacturers’ warranty have added fuel to the fire. Cash-on-delivery has become the most preferred payment option with over 30 per cent buyers opting for it in India, the report further stated.
As per the report, growing significantly at a CAGR of 20-25 per cent annually, organized retail penetration is expected to be over 10 per cent of the total Indian retail market by 2020 as against just 7 per cent currently.
The organized retail market is estimated to increase to 19 per cent across the top seven cities during the same period from the current 9 per cent.
High demand for a superior customer ‘experience,’ penetration of big brands into smaller towns and cities, enhancement in business strategies and operations, along with the movement from unorganised to organised business have been key factors driving this growth.
Furthermore, liberalisation in FDI policies and the introduction of Goods and Service Tax (GST) by the Centre has repositioned the Indian retail sector on the global map, attracting a large number of global retailers into the Indian diaspora and further driving growth of organised retail in the country.
Anarock Retail is an arm of Anarock property consultants that advises domestic and foreign companies on retail projects.