Retail sector will witness 10-13 % growth this year: Deloitte India
30 December 2023, Mumbai
WHY India
With retailers adopting new technologies to cater to the industry’s evolving demands, the Indian retail sector is set to grow at a rate of 10–13 percent next year.
Growth in the sector is likely to be driven by the expansion of the retailers’ network, a growing demand for luxury brands, increasing traction for value brands in smaller cities, and general elections, says Rajat Wahi, Consulting Partner, Deloitte India. .
The rapidly expanding e-commerce sector, with its hyperlocal delivery services and impulse purchases, will also boost growth, Wahi adds.
However, the sector will remain troubled by concerns including rising inflation, supply chain disruption and geopolitical uncertainties. There is likely to be an erosion of customers’ incomes with potential job losses and rising food and fuel inflation. This would have an adverse impact on the retail sector, as per the experts.
Meanwhile, the online sales channel will grow next year as numerous brands and retailers will benefit from the government-promoted Open Network for Digital Commerce (ONDC).and the customisation services offered by the D2C brands.
Anghsuman Bhattarcharya, Consumer Products & Retail Leader, EY India says, the retail sector in India will continue to remain one of the fastest-growing across global markets.
To ease inflationary pressures, retailers will have to innovate their product basket and try to promote luxury products wherever possible, adds Puneet Mansukhani, Part-Retail, PMG India. They would need to adopt regional localisation and fulfilment centres besides introducing festive season to ensure the desired growth in their toplines
Retailers would also need to use data-driven insights to seize performance improvement opportunities, beat rising costs, and identify new markets, products, or services, he notes.
The sector underwent a transformative journey in 2023, notes Kumar Rajagopalan, CEO, Retailers' Association of India.
With the upcoming elections injecting more money into the hands of the poor, sales of valuable items are expected to rise. There will be substantial growth in the business of some D2C brands as they leverage the growing offline market and potential funding.
Moreover, a significant number of retailers are expected to integrate AI (Artificial Intelligence) to enhance business efficiencies and achieve excellence in customer service, adds Rajagopalan.
Wahi opines that, the retail sector would witness an increase in the adoption of technologies like AI, VR (Virtual Reality) and AR (Augmented Reality), enhancing customer experience and operational efficiency.
