The retail industry in India could see a compounded annual growth rate (CAGR) of 10 per cent over 2012-2020, growing from US$ 500 million to $1 trillion in that time frame, a recent report released by PricewaterhouseCoopers International Limited (PwC) said.
In its report titled ‘Future of India – The Winning Leap’, PwC said India’s emerging middle class population, with household earnings between Rs 150,000 and 850,000 per annum, is currently around 640 million, and is poised to reach 900 million in 2021. This will lead the growth of retail sector in the country.
However, 92 per cent of India’s total retail market remains unorganised, dominated by local shops owned by independent private individuals, the report said. In such a scenario, promoting growth of organised retail will strengthen India’s consumption ecosystem, which includes producers, unorganised retailers, consumers, and the government.
Growth in organised retail will create more jobs for people with lower skill levels, according to the report. Currently, the retail sector in India employs up to 40 million people, and if the sector is strengthened, it could produce 10 million additional jobs in the next ten years.
“We envision India boosting the share of organised retail from 8 per cent of total retail in 2012 to 30 per cent in 2024 and 50 per cent in 2034,” authors of the report said.
The report suggested that organised and unorganised retail players can partner to improve the overall retail ecosystem while also generating new benefits for their own customers.
It also pleaded for greater use of technology by retailers to reach customers. By leveraging digital retail channels (e-commerce), retailers could spend less on real estate while also reaching more customers in tier-2 and tier-3 cities. Some leading e-commerce players in India, such as Jabong and Myntra, derive nearly 50 per cent of their revenues from tier-2 cities.
Further, new technologies such as virtual walls and virtual mirrors will further help improve the retail customer experience, thereby encouraging greater consumption.
