Retail & E-commerce

The retail and e-commerce sector in India, in addition to nurturing the growing shift in consumer demands in segments like fashion and groceries, has been one of the key segments to drive the country’s economic growth. Not only has the sector catalyzed employment and job creation, but it has also been pivotal in blending the retail segment with an increased global online and technological presence.

With a greater influx of international brands foraying into Indian markets, 2023 saw 14 new entrants inaugurating their stores across major cities like Mumbai and Delhi. With a shift towards greater digitization and online payment mechanisms, medium and small enterprises are expanding their businesses, with 1.5-2.5 Mn MSMEs marking their online presence. India’s emergence as a leader in the Global Retail Innovation Index 2023 showcases the country’s commitment to serving consumers beyond boundaries and opening up to more trade, envisaging an increase in e-commerce exports to ~$300 Bn by 2030.

With rising income and changing lifestyles, digital shopping by mass consumers is likely to add ~45% to the gross merchandise value of e-commerce by 2030. Aiming for a $2 Tn valuation by 2033 with a growth rate of 9-10%, increased urbanization, steady growth in per capita income to INR 2,08,000 in FY 2022-23 and organized offline retailers demonstrating a YoY growth of 35% in 2022, the retail industry is poised for increased investment opportunities and parallel growth.

The Indian government, intending to enhance the sector’s potential, has taken various steps, such as the Goods and Services Tax, to streamline and offer retailers and e-commerce platforms a hassle-free tax structure to build a conducive business environment. With 60% growth in India’s retail market in 2022 and the luxury retail market with a valuation of $30 Bn, the retail sector in India is amalgamating the range of products as per the needs of each category of consumers.

The government has also allowed 100% FDI under automated routes for single-brand trading and e-commerce to boost the industry’s capabilities, invite international players to invest in the sector and catalyze consumer demand through domestic players.