Indian retail market to touch ₹190L crore mark by 2034
What's the story
India's retail market is projected to exceed ₹190 lakh crore by 2034, according to a report by the Boston Consulting Group (BCG) and the Retailers Association of India (RAI).
The market size has expanded from ₹35 lakh crore in 2014 to ₹82 lakh crore in 2024, reflecting a remarkable growth rate of over 8.9% in the past decade.
This growth is driven by India's economic growth and its varied consumer base.
Consumer diversity
Retailers must navigate India's diverse consumer base
The BCG-RAI report, 'Winning in Bharat & India: The Retail Kaleidoscope,' highlights the need for retailers to understand India's diverse demographics and consumer behavior.
It notes that "the Indian retail market is large and growing," with its growth outpacing overall consumption, reflecting the sector's resilience.
A key driver of this growth is an increasingly discerning consumer base, where more households are moving into affluence while still valuing affordability.
Consumption trajectory
India's consumption growth expected to peak by 2034
India's consumption growth has been steady, except for the COVID-19 pandemic phase, and is expected to peak between 2024 and 2034.
The BCG-RAI report observes that "even as India remains the fastest-growing major economy," it offers a contrasting population with a growing middle class and price-conscious consumers.
The presence of a digitally savvy Gen Z and a growing female workforce is also driving new purchasing habits.
Retail opportunities
Retailers to benefit from embracing India's diverse demographics
The BCG-RAI report calls the Indian retail market a "retail kaleidoscope," full of opportunities in the face of growing complexities.
It notes that retailers who adapt to India's diverse demographics and contrasting consumer behaviors will benefit the most.
Winning strategies include combining consumer-centric insights with sharp execution across online and offline platforms.
"Winning in Bharat and India requires retailers to recognize the different opportunities and choose their focus areas wisely," the report states.
Retail strategies
Successful retailers prioritize specific consumer segments
Successful retailers have been targeting specific consumer segments, the BCG-RAI report noted.
While some excel in mass grocery or fast fashion by focusing on efficiency and value, others dominate premium segments with exclusive assortments and advanced digital tools.
The report highlights that a well-aligned operating model covering merchandise, pricing, in-store experience, network, and promotion is critical to delivering on customer value propositions.