Indian retail industry has demonstrated intense dynamism in recent years and is growing at a rapid pace. It contributes 10% to the country’s GDP (Gross Domestic Product) and 8% to its total employment. While unorganized retail forms over 90% of total trade, the share of organized retail is set to grow up to 18% by 2021 across top cities according to a real estate consulting firm Anarock. This retail development is expected, not just in metros, but also in Tier II and Tier III cities. Expenses incurred in consumption in India is estimated to reach USD 3600 billion by 2020 from USD 1824 billion in 2017. Exponential growth in online shopping, mall culture, shop in shops, higher disposable incomes, rise in the number of the millennial workforce, and changing consumer expectations and lifestyle are the drivers for this tremendous growth. India stands fifth in terms of global ranking of retail industries.

The sharp rise in the consumption patterns of Indians has cleared the path to unprecedented growth in the retail industry from USD 672 billion in 2017 to an estimated USD 1200 billion in 2021. A surge in online retail is the most significant contributor to the flourishing retail industry. According to a study by Statista Research Department, online retail sales will reach USD 45 billion by 2021 from USD 16 billion in 2016. The share of the retail market is expected to jump substantially to 18% in 2021, from a mere 9% in 2017. Online retail has a share of 4% of the total retail sales and will reach 7% of the overall market by 2021. An increase in disposable incomes, increased internet penetration, the launch of the 4G network, and growing investments have led to the fast growth of the e-commerce market. India is expected to achieve the status of the third-largest consumer economy in the world, reaching a figure of USD 400 billion in consumption in 2025.

The Indian luxury market is estimated to rise from USD 30 billion in 2018 to USD 50 billion in 2020. The rapid spread of the internet, growing number of millionaires and disposable incomes, rising aspirational mindset of consumers in Tier II and Tier III cities have supported the upward trend in the sale of luxury goods to Indian consumers.

The buoyant mood is further propelled by the government’s allocation of USD 172 million to commerce and industry in the “Union Budget 2019-2020.”

We have vast experience with clients in the retail sector, which enables us to devise your financial, tax, entry strategy, entity strategy, foreign direct investment strategy and regulatory strategies in an informed manner to enable your retail business to derive the desired value and results.

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