The Retail market in India has undergone a major transformation and has witnessed tremendous growth in the last 10 years. The Overall Retail market is set to cross the $1.75 tn mark by 2026 from $795 bn in 2017. India’s e-commerce retail market which stood at $30 bn in 2019 is also set to grow at a CAGR of 30% for gross merchandise value to be worth $200 bn by 2026. Direct-to-Consumer segment could have a US $100 billion addressable market by 2025.

India ranks among the best countries to invest in Retail space. Factors that make India so attractive include the second largest population in the world, a middle class of 600 mn people, increasing .urbanisation, rising household incomes, connected rural consumers and increasing consumer spending.

• India ranked No. 2 in Global Retail Development Index (GRDI) in 2019.
• Retail is India's largest industry, currently accounting for over 10% of the country's GDP and 8% of total employment.

Recent policy changes allow 100% FDI under the automatic route for single-brand retail trading.

Industry Scenario

The Retail industry in India has experienced a healthy growth over last few years achieving a total market size of $795 bn in 2017.

India’s retail market is estimated to reach $1.75 tn by 2026, from $0.79 tn in 2018, growing at a CAGR of 9-11%, driven by socio-demographic and economic factors such as urbanisation, income growth and rise in nuclear families. On the other hand, the Indian e-commerce industry is expected to cross $200 bn mark by 2026.

The E-commerce market in India is also set to grow at a CAGR of 30% for gross merchandise value to reach $200 bn by 2026, and have a market penetration of 12% compared to 2% currently.

India is largely an unorganized retail market, contributing 88% to the total retail sector in India. The organized retail market is currently valued at $60 bn, while the unorganized market holds the rest. The share of the organized retail market is projected to increase to 22-25% by 2021, thereby reducing the unorganized retail market’s share to 77%. The organized retail market, therefore, has the potential to reach approximately $140-160 bn.

(Source: Invest India)