Bengaluru, March 26 (IANS) India’s overall retail sector is poised to become more than $1.6 trillion opportunity by 2030, offering immense headroom for sustained growth for the organised retail industry, according to a new report on Wednesday.While essential categories will continue to drive the majority of spending, discretionary spending is expected to lead the next wave of expansion, said the report by Redseer Strategy Consultants.
Offline and online organised retailers are actively solving for inefficiencies in the market through better sourcing strategies, improved application of technology and infrastructure innovations.
"As a result, organised retail is projected to become a $600 billion+ segment by 2030, capturing over 35 per cent of the total retail market," the report noted.
Amid regional diversity, price sensitivity and complex supply chains, 350 Indian brands have crossed the $100 million revenue mark.
However, the supply landscape remains fragmented and is expected to remain so, with regional and unbranded brands expected to contribute over 70 per cent of the market by 2030, the report mentioned.
“Scaling ahead will require organised retail models to also address the regional and unbranded consumption, in addition to the branded segment that they’ve traditionally targeted,” said Kushal Bhatnagar, Associate Partner, Redseer Strategy Consultants.
Offline and online players are adopting a mix of strategies, such as backward integration, private labelling, and supply aggregation, to target this opportunity, he mentioned.
The heterogenous consumer preferences in India have led to the emergence of extensive range of stock keeping units (SKUs), further underscoring the supply fragmentation.
India’s culture, language, and tastes change every few kilometers, leading to high SKU proliferation across categories such as snacks, spices, food grains, apparels, jewellery, and home decor.
A large share of consumers favour small-ticket transactions, and prioritise affordability over other factors, while making purchase decisions, the report said.
Multiple unorganised intermediaries exist at both sourcing and distribution levels, making efficient supply chain management a challenge.
General trade (GT) has also thrived due to its accessibility, ability to enable small transactions, and deep integration with local supply chains. It effectively caters to hyper-local consumer preferences, said the report.
—IANS