The Indian retail market is poised to exceed Rs 190 lakh crore by 2034, with retailers who adeptly navigate the country's diverse consumer demographics expected to gain the most, according to a report jointly released by the Boston Consulting Group (BCG) and the Retailers Association of India (RAI).
The study, titled 'Winning in Bharat & India: The Retail Kaleidoscope', highlights that India's retail sector has expanded significantly, growing from Rs 35 lakh crore in 2014 to Rs 82 lakh crore in 2024 at an annual rate of over 8.9 per cent.
"The Indian retail market is large and growing, expected to reach over Rs 190 trillion by 2034. This expansion has outpaced overall consumption, highlighting the sector's resilience and strong momentum," the report stated.
The report highlights that India's consumption growth trajectory remains robust, barring the disruptions caused by the COVID-19 pandemic. It is set to experience the highest surge in consumption between 2024 and 2034.
Retailers face a complex landscape, with the Indian market characterised by stark contrasts—an affluent middle class coexisting with price-conscious consumers, a digitally proficient Gen Z emerging alongside an increasingly influential 45-plus demographic, and a growing female workforce reshaping purchasing behaviours.
"Even as India remains the fastest-growing major economy, its population is marked by striking contrasts, a burgeoning middle class and rising affluence alongside price-conscious consumers, a digitally savvy Gen Z coexisting with an increasingly significant 45-plus cohort, and an expanding female workforce helping shape new purchase behaviours," the report noted.
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The report also emphasised the growing role of omnichannel retail strategies.
While digital payment transactions have surged and online penetration continues to increase, traditional brick-and-mortar stores remain dominant, with over 58 per cent of purchases occurring purely offline.
Despite an inclination towards global trends and brands, Indian consumers continue to demonstrate a strong sense of local pride in their choices, further complicating the retail landscape.
Retailers who tailor their strategies to India's diverse consumer segments are likely to emerge as winners, the report suggested.
By integrating consumer-centric insights with precise execution across both digital and physical retail channels, businesses can not only keep pace with India's growth but also set new industry benchmarks.
"Winning in Bharat and India requires retailers to recognise the different opportunities, and pick sharply where they want to play, and play there well," the report added.
Successful retailers, according to the study, have been deliberate in selecting their consumer focus. "Some excel by championing efficiency and value in mass grocery or fast fashion, whereas others command premium segments through exclusive assortments, superior in-store experiences, and advanced digital tools," it stated.
A finely tuned operational model—including pricing, merchandise, promotions, in-store and omni-experiences, and network planning—remains crucial in delivering a compelling value proposition to consumers, it concluded.
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