As the country recovers from the pandemic, the retail industry has resumed its growth path and is expected to grow at a rate of 10% per year to reach approximately $2 trillion by 2032.
According to a BCG-RAI report titled “Racing towards the Next Wave of Retail in India”, industry segments like food and grocery, restaurants, quick service restaurants (QSR), and consumer durables have recovered to pre-COVID levels.
“The Indian economy continues to be driven by consumption, and we are observing that consumption growth is back in the positive territory after the two-year COVID pause,” BCG Managing Director and Senior Partner Abheek Singhi said.
Noting that India’s retail industry will grow to approximately $2 trillion in the next 10 years, Singhi said “the next decade will see organised retailers focus on footprint expansion, across all formats—offline and online—to fuel future growth.”
As per the report, India’s consumption, which was growing at approximately 12 per cent pre-pandemic, went into negative territory during the pandemic but has now recovered to surpass pre-pandemic growth levels at 17 per cent.
According to the report, e-commerce in the country is expected to reach $130 billion by 2026, as compared to $45 billion in 2021.
The rising competition and the need for constantly improving the customer value proposition are driving the rise of ecosystems and the customers are approached by players across retail and non-retail. We are seeing examples of this trend already in India and is expected to significantly transform the entire landscape in the future.
The report is an in-depth study of retail players in the country, identifying challenges in the prevailing environment and highlighting emerging trends and models that can potentially shape the future of retail.