New Delhi, Feb 29 (KNN) As India marches forward on its economic journey, the retail sector emerges as a beacon of immense potential, poised to ascend to a staggering USD 2 trillion valuation within the next decade.

A recent joint study by the Boston Consulting Group and the Retailers Association of India sheds light on the factors propelling this growth and the strategies imperative for retailers to seize this unprecedented opportunity.

The Indian economy stands firm on a trajectory of robust expansion, with the retail segment projected to burgeon at an impressive rate of 9-10 per cent over the forthcoming years.

Presently valued between USD 820-840 billion, the retail landscape pulsates with vitality amidst evolving consumption patterns and escalating private consumption.

However, recent quarters have witnessed a tepid slowdown across various retail segments encompassing fashion electronics, grocery, and quick-service restaurants (QSRs), save for the resilient jewellery business.

Retailers moan the dwindling like-for-like sales, particularly evident in fashion, grocery, and QSRs, signalling a pivotal need for adaptation and innovation.

While a fleeting surge in demand was observed during the festival season, its sustainability remains questionable, echoing the prevailing uncertainty in demand dynamics for the ensuing quarters.

Contributing factors include modest income levels, a predisposition towards higher savings, and a prevailing inclination towards investment over expenditure.

Notwithstanding the prevailing headwinds, the retail sector stands at the cusp of boundless opportunities, awaiting adept navigation through growth avenues and capitalisation on favourable tailwinds.

Per capita income registers a steadfast ascent, accompanied by a paradigm shift from product-oriented purchases to experiential indulgences, with service categories witnessing a remarkable 1.4-fold growth compared to product categories.

Moreover, burgeoning aspirations among consumers in tier 2 and 3 cities underscore an unignorable reservoir of potential.

Enhanced road connectivity and the burgeoning urbanisation of smaller towns catalyse consumption growth, extending an inviting vista for retail expansion.

To endure and prosper amidst this dynamic milieu, retailers must prioritise both growth and profitability, fostering sustained value creation.

Key imperatives include devising compelling offerings to stimulate volumes, augmenting consumer experiences, exploring novel revenue streams to bolster like-for-like growth, and tailoring store formats and offerings to accommodate a broader demographic.

(KNN Bureau)