The retail market in India is the third largest in Asia and fourth largest in world after the U.S., China and Japan. The growth in retail market of India will still be seeing an increment given the strong macroeconomic factors is tuned in well with the robust demographics and Internet penetration.
Deloitte and the Retailers Association of India (RAI) have released their latest joint report that states the share of organised retail market to increase from 12% in 2017 to 22-25% in 2021. This would be possible if the operation of more and more of international retailers start in India and there is an increase in the Internet penetration here.
The growth of e-commerce market from $24 billion in 2017 to $84 billion in 2021 would also trigger the growth of the market to some extent. Factors like increased usage of smart phones by users and growing Internet penetration are some of the major reasons among others that have been marked in the report for the suggestive growth.
From 260 million smartphone users in 2016, the number is speculated to increase to 450 million by 2021. Further, the report projects that the current 15% of online population (online shoppers) may reach an estimated 50% by 2026. These factors are likely to drive the m-commerce sales from $10.5 billion in 2016 to $38 billion in 2020.
The growth in retail market is going to be a visible $1.2 trillion by 2021; which would be a leap forward from the $795 billion in 2017.
On the other hand, another joint report by the RAI and Boston Consulting Group (BCG) reported of a steady pace in the growth of India's consumption which is seen to be at 13% over the last decade. This rounds up to Rs.110 trillion in 2018 which accounted for 59.3% share of GDP of India. This has been higher than the emerging market average.
Over the last decade, India's consumption has grown at 13% and is projected to grow at 12% over the next 10 years. This amounts to a growth from Rs.33 trillion in 2008 to Rs.330 trillion in 2028. The likely change in the future is going to be in the drivers that bring the change.
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