Indian retail industry is one of the fastest growing in the world. India ranked 63 in the World Bank’s Doing Business 2020 publication and ranked 73 in the United Nations Conference on Trade and Development's Business-to-Consumer (B2C) E-commerce Index 2019. India’s direct selling industry is expected be valued at US$ 2.14 billion by the end of 2021.
India is the fifth-largest and preferred retail destination globally. The country is among the highest in the world in terms of per capita retail store availability. India’s retail sector is experiencing exponential growth with retail development taking place not just in major cities and metros, but also in tier II and III cities. Online penetration of retail is expected to reach 10.7% by 2024 versus 4.7% in 2019. According to India Ratings and Research (Ind-Ra), domestic organised food and grocery retailers are expected to increase by 10% YoY in FY22. By 2024, India's e-commerce industry is expected to increase by 84% to US$ 111 billion, driven by mobile shopping, which is projected to grow at 21% annually over the next four years.
The Indian Retail sector has seen good investments and developments in the recent past.
India’s retail trading sector attracted US$ 4.11 billion FDIs between April 2000-June 2022.
According to data released by the Ministry of Statistics & Programme Implementation (MoSPI), India’s Consumer Price Index (CPI) based retail inflation stood at 6.77% YoY in October 2022.
In November 2022, Aditya Birla Fashion and Retail Ltd. entered into a strategic partnership with the Galeries Lafayette to open luxury department stores and a dedicated e-commerce platform in India.
In October 2022, UPI transactions were valued at Rs. 12.11 lakh crore (US$ 148.32 billion).
In August 2022, Louis Philippe, India’s leading premium menswear brand from Aditya Birla Fashion and Retail Ltd., announced the launch of its outlet in Vadodara, Gujarat.
In August 2022, Wipro Consumer announced the launch of traditional snacks and spices as it forays into packaged foods.
In July 2022, Reliance Brands Limited (rbl) partnered with Maison Valentino to bring to India the most established Italian Maison de Couture.
In June 2022, Reliance brands limited inks a JV with plastic legno spa to strengthen toy manufacturing ecosystem in India
In May 2022, Reliance Brands Limited (rbl) partnered with Tod’s S.p.A, the iconic Italian luxury brand to become the official retailer of the brand across all categories including footwear, handbags and accessories in the Indian market.
In May 2022, GIC acquired 8% stake for US$ 282 million in Aditya Birla Fashion and Retail Limited. In April 2022, Wipro Consumer Care inaugurated its factory in Telangana. It has invested in a state-of-the-art soap finishing line that runs on highest speed of 700 Nos of soap /minute.
In April 2022, the government approved PLI scheme for textiles products for enhancing India’s manufacturing capabilities and enhancing exports with an approved financial outlay of Rs. 10,683 crore (US$ 1.37 billion) over a five-year period.
In FY 2021-22 (till 20th March 2022) total number of digital payment transactions volume stood at Rs. 8,193 crore (US$ 1.05 billion).
In March 2022, Reliance Brands has bought the India franchisee rights and the current Sunglass Hut retail network from DLF Brands.
E-Retail has been a boon during the pandemic and according to a report by Bain & Company in association with Flipkart ‘How India Shops Online 2021’ the e-retail market is expected to grow to US$ 120-140 billion by FY26, increasing at approximately 25-30% p.a. over the next 5 years.
In October 2021, Plum, the direct-to-consumer beauty & personal care brand, announced plan to launch >50 offline stores across India (by 2023) to expand its customer base.
In July 2021, the Andhra Pradesh government announced retail parks policy 2021-26, anticipating targeted retail investment of Rs. 5,000 crore (US$ 674.89 million) in the next five years.
The Government has approved 51% FDI in multi-brand retail and 100% FDI in single-brand retail under the automatic route, which is expected to give a boost to Ease of Doing Business and Make in India schemes, with plans to allow 100% FDI in E-commerce.
The future outlook of the Indian Retail sector looks on track with pandemic easing out.
E-commerce is expanding steadily in the country. Customers have the ever-increasing choice of products at the lowest rates. Online retail market in India is projected to reach US$ 350 billion by 2030 from an estimated US$ 55 billion in 2021, due to rising online shoppers in the country. India is expected to become the world's third-largest consumer economy, reaching Rs. 27.95 lakh crore (US$ 400 billion) in consumption by 2025. Healthy economic growth, changing demographic profile, increasing disposable income, urbanisation, changing consumer tastes and preferences are some of the factors driving growth in the organised retail market in India.
Note: ^ - According to a study by Boston Consulting Group
