Home Retail The future of Indian retail startups

The future of Indian retail startups


Startup incubation is crucial to help aspiring startups build a strong foundation and run their business effectively with office spaces, management training, marketing assistance, and a lot more. A business idea and a workable business model with the support of an incubator is what startups need, aspiring to survive and make it big in the Indian retail industry.

The future of Indian retail startups
Retail industry in India accounts for more than 10 percent of the country’s GDP and 8 percent of the country’s employment

SA’s 120 startup and early stage business incubator play this critical role of providing entrepreneurs with business and resources they might need to compete and survive. With the success rate of 89 percent, they have helped startups become commercial successes in their respective industries. What makes this success rate even more interesting is the fact that approximately 80 percent startups end up failing in their first year.

They provide businesses with advice on their product model, customer management, financial management, creation of a supply chain, and even deployment of management graduates.

Cape Innovation & Technology Initiative and FurnTech are among the other organisations who have had success incubating startups.

Why the Indian Retail Sector?

Retail industry in India accounts for more than 10 percent of the country’s GDP and 8 percent of the country’s employment. This industry has turned out to be one of the most fast-paced industries, and everyone wants a part in it. One major reason for the immense potential of the retail industry in our country, is the fact that India has the second largest population undergoing urbanisation, growth of Internet connectivity all across the country.

Despite the growing business opportunities in the industry, success in Indian retail is still an alien to a lot of these players because of the want for heavy initial investment to be able to survive amidst the growing competition.

This shows that startups delving into the Indian retail sector need all the support and assistance they can get from incubators. This support will help them create a viable business model and have a fighting chance to survive in the middle of all the competition.

Potential vs Performance

Despite the scale of opportunities, existence of competition makes it difficult for businesses to perform optimally and win the game. In the case of startups, being able to stand the ground against global giants is difficult, and almost unattainable sometimes.
However, a sea of change seems to be approaching soon for the Indian retail sector. This sector is standing on the verge of a fast paced growth and the potential of being one of the fastest growing retail markets on a global scale.

AT Kearney’s 2017 Global Retail Development Index ranks top 30 developing countries for retail investment, where India was ranked number 1.

These key factors that can be held responsible for this development are –

– Opening up of the retail sector by the Indian government, to foreign investors. A 100 percent FDI in multi-brand retail of food products has been allowed by the government. This provision is a game changer for the Indian retail sector as grocery and food in retail account for 1/3rd of consumption in India.

– Indian consumers are swiftly shifting from loose sold products to branded ones, willing to pay for the service availed, for the value received, and for premium brands.

– Indian retail sector is one of the top three employers in the country. Government support coupled with changing consumer behaviour, is expected see more job creation in the sector through the near future. More employment will lead to more disposable income, with a vicious cycle leading to more job opportunities.

Currently, despite the exceptional potential this sector holds, diversities in state policies and local factors hinder the retail sector in various regions to meet its true potential. Real estate cost and unavailability of skilled labour in the rural market are some of the factors that are posing a challenge in the growth of the Indian retail sector.

Why Incubation?

Infrastructure is crucial for the visibility and growth of a startup, and incubators, investors, the right tech, and an optimum workplace, are essential for these startups to perform and grow. This support for startups in the country is gradually moving to Tier 2 cities as well for a startup ecosystem that is not focussed on a few major cities of the country.

Incubation helps extend support to the right talent with facilities and the ecosystem that will help them create, innovate, and thrive. This support is going to help startups overcome the many challenges of making it in the Indian retail industry and exploit the opportunities present in the sector to the optimum.


The Indian retail sector is undoubtedly one of the fastest growing and high on potential sectors.

As per a report by MRRSIndia and Assocham, the Indian retail market is expected to hit US $1.1 trillion at a growth rate of over 60 percent by 2020. Contributing factors for this growth rate are going to be the change in lifestyle, rise in income, more foreign players, urbanisation, and favourable demographics, among others.