- Sujata Sachdeva |
A new report by the Boston Consulting Group and Retailers Association of India titled ‘Retail 202: Retrospect, Reinvent, Rewrite’ suggests India’s retail market will to double one trillion dollars (over Rs 62 lakh crores) by 2020 from 600 billion dollars (over Rs 37,00,000 crores) in 2015. This will be driven by income growth, urbanization and attitudinal shifts.
It further adds that while the overall retail market will grow at 12 percent per annum, modern trade will grow twice as fast at 20 percent per annum, and traditional trade at 10 percent. Modern trade includes supermarkets, hypermarkets and other organized retail outlets, while much smaller grocery stores are classified under traditional channels. Modern trade is expected to grow three times to 180 billion dollars (over Rs 11,18,000 crores) in 2020 from 60 billion dollars (over Rs 3,73,000 crores) in 2015 and e-commerce at an even faster clip to quadruple in the same time to become a 60-70 billion dollars (over Rs 3,73,000 to 4,35,000 crores) market, said the report.
By 2020, average household income will increase three times and urbanisation will increase to 40 percent from 31 percent and over 200 million households will be nuclear, representing a 25-50 percent higher consumption per capita spend. Also, attitudinal shifts will be seen as 75 percent of the population will belong to generation I, that is they were below 14 years of age when the economy started opening and hence will have higher consumption levels, added the report.
Additionally, digital is also shaping the way consumers buy which will lead to most of the companies choosing to go hybrid with considerable presence through online medium.