A joint report released by lobby group Federation of Indian Chambers of Commerce and Industry (FICCI) and consultancy company PricewaterhouseCoopers has said that by 2020, India’s retail sector is expected to double to $1.1-1.2 trillion from $630 billion in 2015.
The report, titled Shaping Consumer Trends, further says that the growth will be at a compound annual growth rate (CAGR) of 12 per cent.
The report was released at Massmerize 2016, an annual convention on retail, packaged consumer goods and e-commerce.
The report’s projections indicate that the average household income in India will triple to $18,500 in 2020, from $6,400 in 2010, acting as a major driver in retail growth and leading to evolution of new consumer segments.
Customers are getting more sophisticated, driving firms to focus on premium products, the report said. “Increasing disposable income levels and a rising number of sophisticated consumers have given rise to consumers seeking ‘premium’ products,” it added.
The report says the e-commerce market is expected to reach $125 billion in terms of gross merchandise value (GMV) by 2020, growing at the rate of 31 per cent. GMV is the total value of goods sold over a period of time, without accounting for discounts or sales returns.
It says the packaged consumer goods sector will cross the $100-billion mark by 2020, growing at a rate of 18 per cent, and that the maximum consumer spending is likely to occur in food, household, transport and communication segments.
“Rapid macroeconomic, demographic and lifestyle shifts in the country clearly point towards exponential growth in the packaged goods industry. These shifts, bolstered by policy and regulatory changes have a strong potential of taking India towards its goal of becoming largest consumer market over the next decade,” according to the report.