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Online Retailing to Surpass Organized Retail Levels by 2030

CIO Insider Team | Monday, 26 June, 2023
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According to a recent report, online retailing in the nation may surpass organized retail levels by 2030 as more Indians do their shopping online, yet traditional retailing will continue to hold a disproportionate amount of the market.

In 2030, the value of modern retail, which includes supermarkets and malls, may more than double to $230 billion, while the value of internet shopping increases by 2.5 times to $325 billion. Online retail had a $70 billion market in 2022.

Overall physical retail will nearly treble to $1.6 trillion over the same time span, including both organized retail and conventional mom-and-pop establishments. The majority of this, or $1.3 billion, will go to traditional retail, up from $750 billion in 2022.

“We expect e-commerce to continue its exponential growth and surpass organized retail in scale and size. Additionally, emerging channels such as social commerce, quick commerce and D2C will reshape how millennials and Gen Z will shop in the future. Investment in specialized vertical e-commerce is also expected to grow in the near future," Deloitte said in its report.

The sector also benefits from rising dairy consumption and premiumization trends, with a shift from unbranded to branded and value-added variants," it added.

Quick commerce is anticipated to overtake social commerce in the e-commerce space, growing from its present $2 billion market size to a $40 billion one by 2030. In India, social commerce is anticipated to reach $55 billion by 2022, up from $5 billion.

Growing salaries will be a key factor in consumption, and demographic changes will speed up retail expansion. In fact, until 2030, 65 percent of India's population will still be in the crucial consumer group of 15–59 years old. It predicted that 110 million more households will join India's middle class as income levels rise.

India is already one of the top five retail markets in the world and is projected to overtake China and the US to become the third-largest market by 2030.

By 2030, the retail sales of food and groceries, which currently account for 65 percent of the entire retail market, are expected to double. Although starting from a tiny base, industries like clothing, footwear, and gems and jewelry are also anticipated to expand quickly.

“The food and grocery segment holds the largest share in the sector. Its growth is driven by the increasing consumption of processed foods, including savory items, sweets, and snacks", it added.

The sector also benefits from rising dairy consumption and premiumization trends, with a shift from unbranded to branded and value-added variants," it added. Within apparel and footwear, growth is driven by athleisure and active-wear, with growing health awareness and preference for comfort.

Notably, consumers in India's Tier 2 and Tier 3 cities are driving the country's retail sector into its next stage of expansion, forcing merchants to expand outside Tier 1 cities. The retail environment is changing as a result of the explosive expansion of e-commerce in smaller cities. These cities received more than 60 percent of the orders in 2022.

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