India’s Retail Market to Reach $1.6 Trillion by 2030, Led by Smaller Players
India’s retail sector is set to surpass $1.6 trillion by 2030, with organised retailers projected to account for over 35% of total market value, exceeding $600 billion. While essential goods will remain dominant, the next phase of expansion is expected to be driven by discretionary spending, as per a recent report by Redseer Strategy Consultants.
Fragmentation in the Retail Market
Despite the sector’s rapid growth, the supply side remains highly fragmented, with no single dominant player. This trend is expected to continue, ensuring that smaller, regional, and unbranded brands will make up over 70% of the market.
- Currently, only around 350 brands in India have surpassed $100 million in revenue.
- In comparison, China has approximately 2,800 brands that have crossed this milestone, highlighting the disparity in market concentration.
Factors Contributing to Retail Fragmentation
According to Redseer, three key factors contribute to the sector’s high level of fragmentation:
- Regional Preferences: India’s linguistic and cultural diversity has led to localised consumer patterns. Demand for products such as food, apparel, jewellery, and home décor varies significantly across different states and cities.
- Price Sensitivity: Many consumers prefer smaller transactions and prioritise affordability over bulk purchasing, leading to a highly fragmented demand structure.
- Complex Supply Chains: Multiple unorganised intermediaries make sourcing and distribution more challenging, adding inefficiencies to the system.
India’s diverse consumer base has also resulted in a broad product range across categories like sarees, home décor, toys, spices, and cosmetics, further complicating inventory management.
General Trade Dominates but Faces Challenges
Local kirana stores and small retailers continue to dominate due to their hyper-local focus and accessibility. However, they face structural issues such as:
- Irregular pricing, leading to inconsistent customer experiences.
- Limited standardisation, affecting product availability.
- Supply chain inefficiencies, reducing operational effectiveness.
Organised Retail Grows at a Fast Pace
Organised retail includes large-scale businesses, such as supermarkets, hypermarkets, and retail chains, that adhere to tax and regulatory guidelines. By leveraging:
- Better sourcing strategies,
- Technological advancements, and
- Enhanced infrastructure,
these retailers are expected to exceed $600 billion in market value by 2030.
Shift Towards Organised Distribution
Redseer’s report highlights a shift towards structured retail models that balance variety, affordability, and convenience. These models are helping both offline and online retailers sustain long-term growth.
- Organised retail is growing faster than many traditional brands, reshaping market dynamics.
- To stay competitive, companies must invest in supply chain efficiencies, digital transformation, and consumer-centric innovations.
As India’s retail landscape evolves, industry stakeholders must adapt to changing demands, ensuring sustained market expansion in the coming years.
