New Delhi, May 15 (IANS): Increasing affluence, changing lifestyle and attitude towards spending by young Indians is pushing the retail market, which is expected to grow from about $550 billion in 2015 to $2.1 trillion by 2025, an almost fourfold growth over a decade, a study said on Friday.
"India's young population, increasing affluence, changing lifestyle and attitude towards spending and increasing availability in the smallest of the towns, is spiralling consumption and driving the retail market," said the retail report done by Confederation of Indian Industry along with Wazir Advisors.
"The Indian retail market is thus expected to grow from about $550 billion in 2015 to an estimated $2,100 billion by 2025, an almost four fold growth over a decade," it added.
Within the same period, organised retail is expected to grow seven fold and online retail, a mind boggling 26-fold.
The main drivers for the retail market would be the demographic dividend, increasing incomes fuelling aspirations and rurbanisation and urbanisation.
There are an estimated 12-14 million retailers, making India a country with one of the highest retail densities. The sector is expected to grow at a compound annual growth rate of 14 percent over the next 10 years and will remain one of the top growth markets globally.
"However, given their small bases, the market will still be dominated by the traditional unorganized retail which is expected to grow at a healthy 13 percent per annum, and continue leading the market with 79-80 percent share, even by 2025," the study projected.
It stated that the fear of traditional unorganised retailers that modern organised retailers will wipe them out has settled.
The study further said: "The current fretfulness that organised retailers have about online players will subside soon as the online sector matures and grows past its initial discounting strategies."
Though currently the level of collaboration between unorganized, organised and online retail channels is limited as the market reshuffles and all participants are trying to find their own ground, the scenario is going to dramatically change going forward, the report predicted.
"Each channel will define its own unique strengths and value proposition and will learn to coexist and grow profitably with the other, driven by the consumer's inclusive retail approach."
"The consumer will seamlessly switch between channels depending on his needs and will not shun one for the other. His approach to channel selection will thus be 'inclusive' and not 'exclusive'."