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Indian retail market may cross trillion-dollar mark by 2025: Report

The report said that consumer needs will evolve gradually but distinctly across multiple dimensions such as personalisation, trust in brands as well as omni-channel affinity.

February 26, 2020 / 08:04 PM IST
Representative image

Representative image

The Indian retail market is likely to cross the trillion-dollar mark by 2025, driven by multiple structural, socio-demographic and economic drivers fueling consumption, according to a report by Boston Consulting Group (BCG).

This report was unveiled at the Retail Leadership Summit.

The report highlights how retail has evolved over the past decades, and likely forces that could shape the industry going forward.

"The market is still fragmented and offers an opportunity for the top five retailers to more than double their share from <5% to 10+% in the next decade. 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," said Abheek Singhi, Managing Director and Senior Partner, BCG.

The report reflects on how the industry’s expectations in the past decade have played out.

While many predictions have landed per the expectation, a few have turned out differently.

Retail witnessed the emergence of sustained profitable models across some categories, and ‘Value’ has been a clear proposition that has resonated with consumers.

E-commerce grew strongly, but penetration and share has varied across categories. Mixed pathways gained prominence as against pure channel specific customer journeys, the report stated.

Most significantly, small neighborhood stores have adapted well to the new reality, amidst competition from e-commerce and modern trade, the report stated.

The report said that consumer needs will evolve gradually but distinctly across multiple dimensions such as personalisation, trust in brands as well as omni-channel affinity.

Retailers in parallel will continuously innovate to address challenges posed by the changing external environment.

New data and technology driven trends will disrupt retail, along with new competitive forces which will challenge the rules of the game. Lastly, regulatory moves would have a large impact as well – could be positive or muted for the industry.

Organised retail in India has been shaped by three distinct growth waves over the past decades.

The real size of prize for retail has been achieved when concepts and operations are scalable, driving sustained profitability.

The fourth wave is likely to be shaped by retailers who innovate their business models to stay ahead of a constantly evolving market.

Models anchoring on alliances, technology and the much talked about gig economy could become cornerstones of new retail. Retailers need not build it all, the right alliances will help in speed and capital efficiency.

 "Retailers to improve their organisation’s agility and continue to develop their unique products/ experiences around the customer. Building cost-efficient and technology-enabled operations and partnerships would be key to success in the days to come," said Kumar Rajagopalan, Chief Executive Officer, Retailers Association of India. 

Moneycontrol News
first published: Feb 26, 2020 08:04 pm

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