India's retail sector is expected to grow at 9-10% to reach $2 trillion in the next decade with the country's consumption story continuing to remain strong with steady growth, according to a report.
Yet, organised retailers would need to sustain performance and continue to grow shares as the sector is going through key shifts impacting the pace and shape of growth, said the report by the Boston Consulting Group and Retailers Association of India.
While income growth remains steady, and consumers are optimistic about personal income outlook, consumers are increasingly looking to spend on 'experiences' or save more through newer or nascent vehicles, it said.
"The Indian retail sector will more than double in size to USD 2 trillion in the next decade - across categories and formats - and the successful retailers are the ones who continue to challenge the perceived growth profitability trade-off," BCG Managing Director and Senior Partner Abheek Singhi said.
The report said, "India retail (is) expected to grow at 9-10% to reach $2 trillion in the next decade." Historically, it added organised retail has outperformed underlying category growth but a slowdown was seen in 2023.
The slowdown in growth was reflected across segments in the recent quarters, it noted.
The report pointed out that retailers would need to address key considerations for sustainable growth in the future.
"By focusing on personalised customer experiences, exploring new collaborations, and leveraging AI for efficiency, we can propel India's retail industry towards unprecedented growth and global competitiveness," RAI CEO Kumar Rajagopalan said.
As per the report, stores expansions continue to happen and with increasing urbanisation, there is more consumption expected to happen in tier 1-4 cities.
"While e-commerce continues to grow, net new user addition has seen a slower pace in the year," it said, adding that the role and proposition of online needs to be reimagined.
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