Retailing India's Future

Success will depend on how well companies build robust, cost-effective distribution models that reach deep into the country

- By Kishan Singh

AS INDIA SETS ITS SIGHTS ON A US$ 35 trillion future by 2047, the real engine of growth will not just be factories or exports; it will be shopping carts.

The current decade is make- or-break, with consumer spending expected to power the nation's rise to high-income status. However, retailers are playing on a sticky wicket, as digital commerce steps up not just as a disruptor, but a dominant force in the evolving retail game. India's consumer market is set to grow by 46 per cent by 2030, with consumer spending rising to US$ 4.3 trillion by then from US$ 2.4 trillion in 2024, as per a report by Edelweiss Mutual Fund. “We are witnessing a profound shift in India’s consumer landscape, moving from consumption based on availability to consumption driven by aspiration. It is a phenomenon that has been fuelled by rising disposable incomes, digital adoption, and a growing preference for health, wellness, and sustainable products,” highlighted Angshu Mallick, Managing Director and CEO of AWL Agri Business.

Premiumisation

The biggest shift that will define the next phase of growth is the reclassification of premiumisation. With the upper-income classes rising faster than the lower ones and the ‘destitute’ class shrinking, by the end of the decade, India’s income demographics will be transformed. The huge bulk of the population will comprise a middle class of nearly 1.02 billion in 2046-47, up from 432 million in 2020-21, as per a report by People Research on India’s Consumer Economy.

As the overall category of the rich, or those with family income of over Rs 30 lakh in 2020-21, is expected to grow to 100 million households with 437 million consumers by 2046-47, the rising income will boost demand for more premium products, fuelling the sector's contribution to the India@2047 vision.