New Delhi: More shoppers shopping inside departmental stores and online will help push the share of modern trade and e-commerce in India's overall retail market, consulting firm Deloitte said in a report released on February 26.
The share of the organised retail market is expected to increase from 12% in 2017 to 22%-25% by 2021, according to findings of the report. This will be driven by increased internet penetration in the country and more international retailers operating in India, the report said.
Overall, the retail market is expected to grow from $795 billion in 2017 to $1.2 trillion by 2021. This will also be driven by the growth of the e-commerce market that will move from $24 billion in 2017 to $84 billion in 2021.
The share of traditional trade comprising mom-and-pop stores will decline to 75% in 2021 from 88% in 2017, as more shoppers pivot to other modes of shopping.
Organised grocery stores and departmental store chains will see their share of shopping double to nearly 18% by 2021. The share of e-commerce in overall retail trade will move from 3% to 7% during the same period, the report noted.
“The last two years were a damper for retail overall because of demonetisation as well as the transition to the GST. The year 2018 was the springboard where companies could finally take off," said Anil Talreja, Deloitte’s consumer business leader, on improved estimates for the organised retail sector. If the election year goes well and other macros are in place, retail trade will grow as projected, added Talreja.
Talreja added that going forward tech-savvy consumers are going to push retailers and consumer goods makers to become smarter in ways they reach shoppers, prompting online shopping and omni-channel commerce to grow.
India’s retail market is still dominated by mom-and-pop stores or traditional kirana stores. However, over the last few years home-grown companies and foreign investors have been expanding their presence online and in big departmental stores.
Last year, American retailer Walmart bough Indian e-commerce firm Flipkart in a $16 billion deal. Then, in September private equity firm Samara along with Amazon bought departmental store chain More. Reliance Retail, the retail arm of India’s biggest conglomerate that runs over 9,900 stores, is expected to consider a stock listing, Mint reported earlier this week.