Snapshot

India - The Top Retail Destination

The Retail market in India has undergone a major transformation and has witnessed tremendous growth in the last 10 years. The Overall Retail market is set to cross the $ 1.7 tn mark by 2020 from $795  bn in 2017. India’s e-commerce market is also set to grow at a CAGR of 30% for gross merchandise value to be worth $ 200 bn by 2026.

India ranks among the best countries to invest in Retail space. Factors that make India so attractive include the second largest population in the world, a middle class of 600 mn people, increasing .urbanisation, rising household incomes, connected rural consumers and increasing consumer spending.

  • India ranked No. 2 in Global Retail Development Index (GRDI) in 2019.
  • Retail is India's largest industry, currently accounting for over 10% of the country's GDP and 8% of total employment.

Recent policy changes allow 100% FDI under the automatic route for single-brand retail trading.

For further details, please refer FDI Policy

  • %

    Contribution to India's GDP

  • %

    Share in India's employment

  • X

    Rise in consumption

  • X

    Growth in organized retail

E commerce business in India

India ranked No.2 in Global Retail Development Index (GRDI) in 2019

Retail investors in India

India to have more internet users (650 mn) than the entire population of six G7 countries by 2021

Business opportunities in ecommerce

India to become third-largest consumer economy by 2025 (consumption expenditure to increase by a factor of 3 to reach $ 4 tn)

Industry Scenario

The Retail industry in India has experienced a healthy growth over last few years achieving a total market size of $795 bn in 2017.

The Retail market in India is projected to reach $1.375 tn, while the Indian e-commerce industry is expected to cross  200 bn mark by 2026.

The E-commerce market in India is also set to grow at a CAGR of 30% for gross merchandise value to reach $200 bn by 2026, and have a market penetration of 12% compared to 2% currently.

India is largely an unorganized retail market, contributing 88% to the total retail sector in India. The organized retail market is currently valued at $60 bn, while the unorganized market holds the rest. The share of the organized retail market is projected to increase to 22-25% by 2021, thereby reducing the unorganized retail market’s share to 77%. The organized retail market, therefore, has the potential to reach approximately $140-160 bn.

Growth Drivers

  • Growing income

    3X rise in average household income to reach $18.4 mn in 2020

  • Increased online spending

    Online buyers to be 350 million by 2025 from existing 90 million, with digital spending Projected to increase more than tenfold to $550 bn & account for 35% of all retail sales by 2025

  • Growth of rural consumption

    Rural per capita consumption will grow 4.3 times by 2030, compared to 3.5 times in urban areas

  • Young millennial households

    India will add nearly 90 million new households headed by millennials, who were born into liberalized India. The average age of the country by 2025 will be 29 with the world’s largest skilled manpower pool of 600 million+ by 2025.

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FAQ

Frequently
Asked Questions

Are we allowed to sell products of a sub brand if we have a Single Brand Retail Trade (SBRT) license?

No, any addition to the product/product categories to be sold under 'Single Brand' would require a fresh approval of the Government.

For more information, click here.

What are the rules for sale of goods in online e-commerce?

An e-commerce entity will not be permitted more than 25% of the sales affected through its marketplace from one vendor or their group companies.

For more information, click here.

If I want to set up online and I already operate as an SBRT, do I need special permission?

Subject to the conditions of SBRT under the FDI policy (link), a single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.

Describe the term wholesale cash and carry as per the Foreign Direct Investment policy.

Cash & Carry Wholesale trading/Wholesale trading, would mean sale of goods/merchandise to retailers, industrial, commercial, institutional or other professional business users or to other wholesalers and related subordinated service providers.

For more information, click here.

What is a marketplace and inventory based model of e-commerce?

1) Marketplace based model of e-commerce means providing an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between the buyer and seller.


2) Inventory based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.

For more information, click here.

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Authored By:
Kartikeya Saigal

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