Retail sector set to touch $1,750bn by 2026, says FICCI-Deloitte report
Moneycontrol , Oct 10, 2018
India is one of the fastest growing major economies in the world, leading to a high growth consumer and retail market, presenting massive investment and business opportunities in the retail space, according to a FICCI- Deloitte report, titled 'Consumer LEADS'. The report provides a roadmap for the industry that covers strategy, operations, organisation, processes and systems.
The Indian retail sector is expected to touch $1,750 billion by 2026, a compounded annual growth rate of 7.8 percent. The e-commerce space is expected to grow rapidly in India, one of the fastest in Asia as well as globally, at a CAGR of over 30 percent during 2016-21, according to the report.
Commenting on the report, Rajat Wahi, Partner, Deloitte India, said, “Healthy growth of the Indian economy, coupled with favourable demographic factors in the country, is expected to drive growth in the retail, consumer packaged goods (CPG) and e-commerce industries."
He stated that the retail industry is pegged to grow over 10 percent CAGR to $1,200 billion by 2021 and predicts an over 30 percent increase in the e-commerce market to $80-120 billion.
The report stated that organised retail market will constitute nearly 20-25 percent of the overall retail market by 2021, up from the current 10-12 percent.
Technology is expected to transform consumer markets through major disruptions and evolutions, augmenting overall growth in retail, CPG and e-commerce segments.
With this, consumers would be able to leverage technology to indulge in two-way communication with brands, leading to the emergence of a new consumer-to-business (C2B) market model, where brands develop new products taking cues from consumer demands.
While higher digital investments would be the key priority for brands looking to attract consumers, adopting sustainable practices throughout the value chain would ensure triple bottomline parameters - social, environmental and economic sustainability - as well as enhance the brand value.
Even as the unorganised format dominates the retail market, the share of organised segment is growing rapidly. Food and grocery is a major segment, accounting for 65 percent of the retail market.
The report reveals that emerging fields in the technology sector, ranging from precision farming to data analytics, have the potential to increase efficiency of businesses significantly, providing more opportunities for the FMCG, retail and e-commerce sectors.
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