India's retail market expected to cross $1.6 trn by 2030: Report

Despite this massive growth, the sector is highly fragmented, with regional and unbranded players set to control more than 70 per cent of the market.

Essential categories will continue to dominate consumer spending, while discretionary spending is expected to drive the next wave of expansion.

Rising disposable incomes and evolving preferences have led to a rise in demand for non-essential goods, forcing brands to innovate and offer premium products and experiences to capture the shifting market, the report notes.

A key defining trait of Indian retail is the sheer diversity in product preferences, leading to an extensive range of stock keeping units (SKUs). This underscores the challenge of supply fragmentation, making national-scale expansion difficult for brands.

Around 350 brands in India now have crossed the $100 million revenue mark—just one-eighth of China’s 2,800 brands.

General trade (GT), consisting of small, independent retailers, continues to dominate Indian retail due to its accessibility and deep understanding of hyperlocal consumer preferences. However, GT faces structural inefficiencies, including inconsistencies in pricing, availability and standardisation.

While it effectively caters to small-ticket transactions and region-specific demands, its informal operations and fragmented supply chains lead to inefficiencies that limit growth and scale.

Organised retail—both online and offline—however, is rapidly gaining ground by addressing these inefficiencies. With its market share expected to reach $600 billion by 2030, it is projected to account for over 35 per cent of total retail in the country.

Companies are leveraging digital technologies, advanced sourcing strategies and infrastructure innovations to streamline operations, improve supply chains and enhance customer experience.

To effectively serve India’s heterogeneous consumer base, organised retail models are evolving around three core principles: assortment, value and convenience. Unlike traditional retail, these models are designed to cater to a broad spectrum of customers while coexisting with the GT-led distribution system, the report observes.

Organised retail players can tap into the growing demand for structured and reliable shopping experiences by balancing variety and affordability.

Organised distribution networks are now outpacing the growth of legacy pan-India brands, shifting market power in favour of retailers with structured supply chains, the report remarked.

To capitalise on this, companies must integrate regional and unbranded products into their offerings, reaching a wider consumer base beyond premium branded goods, it suggested.

Both online and offline retailers are adopting various strategies to strengthen their foothold. These approaches, which include backward integration, private labeling and supply aggregation, help companies optimise supply chains, reduce costs and expand product availability.

ALCHEMPro News Desk (DS)