Valued at $1.06 trillion in 2024 and projected to nearly double to $1.93 trillion by 2030 at a 10-per cent compounded annual growth rate (CAGR), the Indian retail sector’s momentum is anchored by a deep home market that acts as a buffer against global trade volatility, said the report.
The report revealed that India’s retail and consumer landscape is undergoing a transformation, powered by robust domestic consumption alongside a surge in digital adoption, premiumisation and the rapid rise of e-commerce across both urban and emerging markets.
Tier-II and -III cities now account for over three-fifths of all e-commerce transactions in India. Quick commerce in India, already operating in over 80 cities, is growing at 70-80 per cent CAGR—the fastest in the world.
Gen Z will account for 43 per cent of India’s total consumption this year, with a direct spending power of $250 billion, the report titled ‘Spotting India’s PRIME innovation moment’ said.
Rising purchasing power, including Gen Z’s direct spending capacity of $250 billion, is not only sustaining domestic demand but also fuelling brand confidence to scale internationally. This convergence of domestic resilience and improved global market access positions India as both a consumption powerhouse and a formidable export base.
Six key consumer demand trends identified in the report are digital-first consumption gaining ground; Gen Z fuelling aspirational premiumisation; ‘Made in India’ earning consumer trust; tier-II and -III cities powering omni-channel growth; quick commerce transforming market access; and sustainability shaping brand preference.
Online marketplaces now influence 73 per cent of purchase decisions, with YouTube reviews (40 per cent) and peer recommendations (51 per cent) emerging as trusted alternatives to traditional influencer marketing. India’s D2C market crossed $80 billion in 2024 and is on track to exceed $100 billion in 2025, redefining how brands scale and connect with consumers, said the report.
The luxury fashion resale market alone is projected to grow at a 13 per cent CAGR by 2032, reflecting a shift towards high-value, aspirational purchases.
The preference for locally-made products is strengthening. Local sourcing, regional flavours and domestic manufacturing are emerging as strong competitive advantages, a Deloitte release said citing the report.
Over 60 per cent of e-commerce transactions now originate from tier-II and -III cities, signalling a retail shift beyond metros.
More than 60 per cent of Gen Z and millennials prefer brands with transparent sustainability practices. Demand is rising for eco-friendly packaging, clean-label products and resale models, with sustainable, functional and plus-size fashion projected to exceed $18 billion by fiscal 2031-32.
While challenges such as global demand uncertainty, supply chain pressures and talent upskilling persist, the sector’s long-term outlook remains strong, precisely because of this domestic demand resilience, the report added.
ALCHEMPro News Desk (DS)
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