Retail Business Growth In India

India’s retail is poised to witness exponential growth in the years ahead! 

The e-commerce industry in India is supposed to cross the 350-billion-dollar mark in terms of GMV (gross merchandise value) by 2030. This represents a CAGR (compound annual growth rate) of 23% in this particular period.

Growth in the retail market 

In fact, the retail market is supposed to be worth 1.5 trillion dollars in 2030. In 2020, the same market was worth 0.793 trillion. The biggest reasons in this case are going to be economic and socio-demographic factors like urbanization, rise of nuclear families, and growth in income levels across the country.

The situation in the first half of 2021

During the first six months of 2021, e-commerce made up almost 33.33% of various electronic categories. 

At that time, 50% of the smartphones sold were through the digital channels. In terms of apparel sales the percentage was around 20%. During 2020, the consumer internet companies and the e-commerce generated in excess of eight billion dollars through VC (venture capital) and PE (private equity) investments. Around 400 such deals were signed at that time. It is expected that by 2030 India would become the third-biggest retail market in the world.

 Condition of the Indian retail market 

The thing with the retail market in India is that it is not an organized one. However, the organized part of the market has increased in value by around 50% between 2012 and 2020. As such, at present its value stands at almost 12% of the entire retail market. It is expected that by 2025 this particular part would grow at a CAGR of 15% to make up 18% of the entire market as such.

The biggest drivers of such growth will be segments such as accessories and apparel (that would take up 18% of the organized retail market), home and living (that would take up 6% of the organized retail market), and consumer electronics (that would take up 6% of the organized retail market).

 The role of growing income in the growth 

It is expected that by 2030 the number of middle-income households in India would increase by 140 million. In case of high-income households this is expected to be at 21 million. This means that there would be a huge number of emerging middle-class families at that time.

The role of increased online spending in the growth 

It is expected that by 2030 500 million people would be shopping online in India. When you compare this number to 150 million in 2020 this represents a significant leap indeed.

The role of growing rural consumption in the growth 

By 2030, the rate of per capita rural consumption in India would increase by 430% as opposed to 350% in the urban regions in the same timeframe.

The role of young millennial households in the growth

It is expected that by 2030 India would have 90 million new households headed by millennials who were born after the economic liberalization of India, thus playing a major role in the growth.

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