India’s retail market is projected to surpass ₹190 trillion by 2034, driven by economic expansion, rising affluence, and evolving consumer preferences, according to a joint report by Boston Consulting Group (BCG) and the Retailers Association of India (RAI).
The report, titled “Winning in Bharat & India: The Retail Kaleidoscope”, highlights how retailers that successfully navigate India’s diverse demographics and consumer behaviors will emerge as market leaders in the next decade.
Retail Growth Driven by Rising Consumption
India’s retail market grew from ₹35 trillion in 2014 to ₹82 trillion in 2024, expanding at an 8.9% CAGR over the past decade. The report predicts that 2024-2034 will witness the highest consumption growth ever, reinforcing India’s position as the fastest-growing major economy.
“This expansion has outpaced overall consumption, highlighting the sector’s resilience and strong momentum,” the report states.
However, retailers must balance affordability and aspiration, as price-conscious consumers and affluent buyers coexist, requiring tailored strategies for different market segments.
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Contrasting Consumer Segments Shape Retail Trends
India’s retail landscape is increasingly complex, with distinct consumer groups coexisting:
- A growing middle class and an emerging affluent population alongside budget-conscious shoppers.
- Digitally savvy Gen Z consumers coexisting with an expanding 45+ consumer base.
- A rising female workforce, influencing new purchasing behaviors.
These factors create a “retail kaleidoscope,” where opportunities abound, but complexities increase for businesses.
Omnichannel Retail and Local Pride
The rise of digital payments and e-commerce is accelerating omnichannel retail adoption, yet 58% of purchases still happen offline. Consumers remain influenced by global trends, but there is also a strong preference for local brands and homegrown pride.
“Retailers capable of embracing India’s diverse demographics and contrasting consumer behaviors stand to gain the most,” the report notes.
Winning in ‘Bharat’ and ‘India’
The report emphasizes that retailers must be selective in their market approach to succeed in both urban (‘India’) and rural (‘Bharat’) markets.
Successful retailers focus on specific consumer segments, excelling in:
- Mass grocery and fast fashion through efficiency and value-driven pricing.
- Premium segments, leveraging exclusive product assortments, in-store experiences, and digital tools.
A well-aligned operational model—covering merchandising, pricing, omnichannel experiences, and promotional strategies—is essential to execute these strategies effectively.
As India’s retail sector continues its rapid expansion, businesses that leverage consumer insights, embrace omnichannel strategies, and adapt to local trends will set the benchmark for retail success in the coming decade.
