India's retail market to be $1.1 trillion by 2020: Study

16 Nov '17

2 min read

The retail market in India is projected to reach $1.1 trillion by 2020 from the current level of $680 billion, according to a joint study by MRSSIndia.com and the Associated Chambers of Commerce and Industry of India (ASSOCHAM), which foresees the fast moving consumer goods (FMCG) market reaching $103.7 billion by 2020 from $ 49 billion now.

The exponentially-rowing retail and FMCG markets in the country are expected to grow annually at 20 per cent and 21 per cent respectively, says the study. MRSSIndia.com is an independent market research agency.

The more than 600 towns with population of less than a million will add another 30 per cent of affluent households and is a potential market yet to be grabbed, an ASSOCHAM press release said quoting the study.

The rural FMCG market in India is expected to grow at a CAGR of 14.6 per cent, and reach $220 billion by 2025 from $29.4 billion in 2016.

The study observed that demand is shaped by factors such as, a noticeable shift in demographics with a rise in middle class income, rise in the number of smaller towns entering the consumption bandwagon, emergence of new channels like e-commerce, proliferation of Internet and demand driven by digital media.

After the implementation of GST, retailers are expecting FMCG companies to reduce product prices as the new tax regime can impact buying behaviour. The retailers believe if the companies don’t revise their prices, they will lose around 2-3 per cent margin, noted the study.

However, FMCG companies have not focussed much on strategies for warehouse operations and transportation, the study added. (DS)

Fibre2Fashion News Desk – India

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