How will the Indian Retail Market revive after the Covid-19?


  • In 2019, the Indian retail market was valued at $26.67 billion and it is estimated to reach $1.1 trillion by 2020. India’s increasing population is surging the online retail sector. By 2025, India is assumed to be the world's third-largest consumer economy, reaching 400 billion dollars in consumption. By 2024, India’s E-commerce sector will reach US$ 99 billion, growing at a CAGR of 27% in comparison to 2019.

Source: emarketer

  • In 2020 the Indian online grocery market is predicted to exceed sales by Rs 22,500 crore, which is a 76% hike from the previous year. The entrance of international retailers has also impacted the country’s retail industry. Various innovative retailers have developed advanced technologies surging towards an integrated future. To implement these strategies to their business, retailers are investing highly in modified and technologies in vogue.

  • According to per capita retail store availability, India is one of the highest across the globe. The Indian retail industry is making major changes in metropolitan cities including tier II and III cities.

  • Strong economic growth, improving demographic outline, rising income, urbanization, the transformation of consumer preferences, are some of the factors driving growth in the organized retail market in India. However, due to the outbreak of the Covid-19 in 2020 has disruptively impacted the retail business. With the shift of consumer behavior, the retail sector has witnessed a significant fall.

Source: Businesststandard

  • Non-Grocery retailers are reporting an 80% to 100% decline in sales. Retailers of essential items are facing losses as they are restricted from selling non-essential items.

Development in the Retail Sector of India

  • The integration of blockchain technology in the retail market have verified and decentralized transactions. This technology aims to simplify and enable omnichannel retailing.

  • As per the marketsandmarkets, the blockchain in the retail market produced $44.2 million in 2017 and it is anticipated to reach $2,339.5 million by 2023, at a CAGR of 96.4% during the 2018-2023 period.

  • Virtual and Augmented Reality looks forward to enhancing the customer experience by offering them searching for products offline to virtually trying them, these technologies are already integrated by several retailers today. This is beneficial for brand exposure, helping the consumer to get the product suitable for their needs.

Source: indianinfoline

  • Google Shopping is a type of shopping service that encourages consumers to browse, purchase, and compare physical products across various retailers without physically attending them or visiting every brands’ website. This shopping service makes up 80.0% of retailers' budgets between the two channels and it plays an essential role in transforming buyers.

  • On the other hand, the retail robotics market was valued at $19.4 billion in 2018 and it is estimated to reach $144.93 billion by 2026, surging at a CAGR of 28.96% during the 2019-2026 period. Artificial Intelligence in the retail industry generated a revenue of 2306.8 million dollars and is estimated to reach $23,426.3 million by 2026.

Source: mordorintelligence

  • As per the grandviewresearch, the internet of things in the retail industry is predicted to value at $94.44 billion by 2025, with a CAGR of 21.5%. The accelerating demand for more suitable and improved services, various distribution channels, and enhanced experience is heightening the retail market in India.

Pandemic’s influence on the Retail Sector of India

  • The coronavirus induced lockdown has resulted in the closure of retail stores all over the country. This impacted the industry financially leading to large-scale unemployment. Nearly 85% of retail stores are showing a massive decline in sales. More than 95% of non-food retail markets have been shut down. Whereas, the food retail market has also witnessed a decline in sales which is lesser than the non-food retail market.

  • The retail industry is transforming its physical stores into virtual stores. This keeps their sales going as they are readily available to any consumer in the country. The online retail market has seen a rise during the lockdown period, especially the market selling essential goods. Technology has supported the retail industry to digitalize their platforms, transforming its business model to fit into the new normal.

Source: S&P Global

  • The extension of organized retail in India is expected to reduce, says Anuj Kejriwal, MD, and CEO, Anarock Retail. “In the pre-Covid months of 2020, the sector accounted for just 10% of the market share and was expected to grow to 25% by 2025. Now, this may take a longer time. Local shops have gained significant customer confidence and mall owners are now re-strategizing operations.”

  • Munish Khanna, Chief Revenue Officer, Express Avenue, and a member of SCAI, stated “Considering the current liquidity situation of our retail partners, we haven’t raised any invoices yet. Quoting the SCAI’s norms, he says, going forward, we can expect masks to be compulsory, customer touchpoints to be regularly sanitized, a restricted washroom policy, crowd control, and temperature screening.”

  • In 2020, the online food delivery platform, Zomato, has stated partnerships with NIVEA, FieldFresh Foods, and Grofers. Amazon has partnered with Reliance’s JioMart. This provides an opportunity for traditional stores to digitalize their operations instantly, and e-tailers to expand their product range to satisfy the consumer demand.

Market Size and Investment Scenario

  • As per the Department for Promotion of Industry and Internal Trade (DPIIT), the Indian retail market has got Foreign Direct Investment (FDI) equity inflow amounting to US$ 2.12 billion from April to March 2020.

  • The retail industry reached US$ 950 billion in 2018 at a CAGR of 13% and is anticipated to reach US$ 1.1 trillion by 2020. Revenue obtained from online retail is predicted to approximate US$ 60 billion by 2020.

Source: grandviewresearch

  • Revenue of India’s offline retailers, also known as brick and mortar (B&M) retailers, is estimated to grow by Rs 10,000-12,000 crore (US$ 1.39-2.77 billion) in FY20.

  • India’s retail sector attracted US$ 970 million from several private equity funds in 2019. The retail industry is foreseen to reach US$ 1.1 trillion by 2020.

  • India ranked 63rd in the World Bank’s Doing Business 2020 publication. India ranked 73rd in the United Nations Conference on Trade and Development's Business-to-Consumer (B2C) E-commerce Index 2019.

Source: Investyadna

  • The Government of India has allowed 51% FDI in multi-brand retail and 100% FDI in single-brand retail. The government has allowed 100% FDI in the online retail of goods and services via the automatic route, thereby providing certainty on the current businesses of e-commerce companies working in India.

  • In 2019, India’s retail sector drew US$ 970 million from various private equity (PE) funds. Walmart Investments Cooperative U.A invested Rs 2.75 billion in Wal-Mart India Pvt Ltd.


  • Indian retail industry has developed as one of the most influential industries due to its flexibility to the new normal by digitalization and developing their business strategies. By 2020 total consumption expenditure is foreseen to reach nearly US$ 3,600 billion from US$ 1,824 billion in 2017. It values over 10% of the country’s gross domestic product (GDP) and around 8% of the employment. India is the world’s fifth-largest global destination in the retail market. India ranked 73 in the United Nations Conference on Trade and Development's Business-to-Consumer (B2C) E-commerce Index in the fiscal year 2019.

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