India’s organised retail market could double by 2021, according to Deloitte. Ecommerce, currently pegged at $200 billion, is likely to drive this next level of growth.
India’s e-commerce marketplace is growing at a whopping 32% CAGR and is expected to perform at an accelerated pace, boosting the country’s overall consumer segment growth. This was revealed in Deloitte’s 2019 consumer business focused report titled ‘Unravelling the Indian Consumer’, which was released at Retailers Association of India Summit held in Mumbai on February, 2019.
Deloitte claimed that the segment is poised to grow from the current market value of $200 billion to $1.2 trillion by 2021. Some of the factors propelling this progress include popularity of mobile wallets and increasing internet penetration. Mobile wallet transactions in the country has increased from INR 200 billion in FY16 to INR 3,000 billion in FY18. This has added to the ease of convenience in online shopping, changing buying patterns in rural and urban Indian cities.
In fact, convenience is an important consideration for millennials on account of their hectic lifestyle. For the working younger generation, dearth of time is one of the key reasons for opting for online shopping and online ordering from restaurants. It is for this reason that the ‘ready-to-eat’ product category has grown exponentially at the rate of over 28% per annum over the last five years.
It is also noteworthy that India’s millennial population has mostly championed ecommerce buying across tier one, two, and three markets. Talking about this, Anil Talreja, Partner, Deloitte India said, “This has prompted retailers and retail brands to offer innovation by way of offering experiential shopping by using advanced data analytics, bots and drones, beacons, cloud-platforms, AR and VR to understand the real need of consumers. Additionally, it has ensured business maturity coupled with emergence of solid platform for market players such as consumers, distributors, logistics service providers and development of the ancillary sectors including transportation, logistics, cold chain facilities, etc., which will help India consumer business to the next level of growth.”
While highlighting the sub-sector performance, the report showed that F&B and apparel, footwear and accessories space contribute a bigger share to consumer retail pie. However, FMCG and automotive companies displayed higher numbers for total market capitalisation when compared to the former.