India's retail sector set to cross $2 trillion by 2030, says report

India’s retail market is poised to surpass $2.2 trillion by 2030, with approximately 90 per cent of sales expected to occur offline, according to the report Decoding Omnichannel: Strategies for D2C Brands by Accel, Fireside Ventures, and Redseer Strategy Consultants. The report also finds that a substantial portion of all purchases will be influenced by what consumers see online.

While consumer companies like Mamaearth saw successful initial public offerings (IPOs), startups such as Cult.fit, Urban Company, Curefoods, Homelane, and Lenskart, among others, have successfully scaled. The journeys of these companies reflect a dynamic shift in consumer behaviour towards omnichannel shopping experiences, where consumers traverse different channels at various stages of the purchase funnel.

 

“The fusion of online and offline presence is distinctly Indian, reflecting the unique preferences and behaviours of Indian consumers. It bridges trust and convenience barriers, accommodating a shopping journey characterized by a mix of traditional values and modern conveniences. Agrostar, for instance, delivers an omnichannel experience to farmers in rural India, who both embrace the convenience of online ordering and still value the tactile experience and personal interaction of in-store pickups,” said Prashanth Prakash, partner at Accel. “While the first generation of omnichannel brands focused on building omnichannel technology, the next generation will introduce new, uniquely Indian business models and solutions.”

The Decoding Omnichannel report indicates that digital-first brands are best positioned to lead the charge in scaling omnichannel strategies across various consumption categories in the country. Digital-first brands can leverage their product innovation engines, data-driven marketing strategies, and tech backbone to scale effectively and efficiently across different offline channels.

Kanwaljit Singh, founder and managing partner at Fireside Ventures, said, “For every Sweet Karam Coffee that leverages quick-commerce as a discovery channel, there’s a boAt that uses it to drive e-commerce bestsellers front and centre. While no single formula works across categories, we have several learnings to share. We believe consumer brands should be omniprepared for omnichannel.”

Anil Kumar, founder and CEO of Redseer Strategy Consultants, said he has tracked the journey of Indian consumer brands over the past decade and a half, where many pioneering brands and platforms established online as a viable channel. With that accomplished, the players are now evolving to broaden their focus by serving consumers wherever they are, whether online or offline.

“One prominent example of this would be Mamaearth, which, having started as an online D2C brand, is driving a significant chunk of its topline from offline retail stores,” said Kumar. “While some brands have shown the way, brands or platforms will have their unique journeys as they move omnichannel or multi-channel, and that'll include nuanced decisions on channel strategy across the consumer journey based on the product category and consumers' maturity."