Kolkata, Mar 8 (UNI) As India leaps forward to become a digitally transformed nation,
the country’s retail sector has emerged as one of the most dynamically-evolving,
rapidly digitizing sectors, with the second-largest consumer base in the world.
In 2020, Indian retail has emerged as the world’s 5th largest market undergoing rapid
digital transformation.
The National Association of Software and Services Companies (NASSCOM), in
association with Technopak, a leading management and consulting firm, today launched
its report, titled, “Retail 4.0: India story - Unlocking Value through Online and Offline
Collaborations.”
Over the last decade, the Indian retail market size has witnessed a massive growth of 3X, accounting for Rs$800 Bn, contributing 10% to India’s GDP In FY 2019-20 and 8% to the total workforce with more than 35 Mn employees. The growth has been backed by sustained
digital transformation.
COVID-19 has been a litmus test for resilience and adaptability, and the Indian retail sector
has been largely successful in navigating the crisis by accelerating digital adoption and the
shift to online in the country. The convergence of retail channels and the collective evolution
of their capabilities via tech-enabled collaborations will define the Retail 4.0 evolution in India.
Speaking at the launch of the report, Amitabh Kant, CEO, Niti Aayog, Government of India,
said, “Retail sector is one of the growth engines for the nation’s economy, with a double-digit contribution to the GDP, and employment to nearly 35 million individuals in FY2020. The
COVID 19 pandemic backed by ever-changing consumer preference has accelerated the
adoption of online and offline play that will define the next phase of retail growth in the country.
This will create enormous potential in terms of job growth, exports, and an inclusive retail
ecosystem with great participation of MSMEs. Going forward, technology will be the key driver
of retail evolution in the future. The government of India is in process of formulating the
National Retail Trade Policy which will not only create a conducive environment for retail trade
but will also simplify policies hindering the growth of the sector in the country.”
Retail 4.0 will result in a significant rise in the size of the domestic market, job creation, and
exports. The changing demand and supply drivers are likely to accelerate the growth momentum, with the India retail market reaching up-to USD 1.5 Tn by FY2030. The sector can add more
than 25 Mn new jobs by FY2030. Of this, a lion’s share will be the Offline + Online model which
will account for 50% of the total retail employment addition - almost 12 million, enable $125 billion worth of exports and account for 37% of total retail tax contribution amounting to approx. $8
billion incremental GST contribution by 2030.
With the increasing rise in Digital Natives and Digital Savvy customers, retailers are embracing
the use of data-driven advanced analytics, and prediction tech to tailor customer-centric product/service offerings leading to enhanced personalization experience. Further, to minimize
and alter cost structures effectively, retailers both traditional and online are increasingly digitizing point-of-sale (PoS), in-store operations, and inventory tracking in face of evolving demand.
Speaking on the occasion, Debjani Ghosh, President, NASSCOM, said, "The Indian Retail
industry performance in the last decade has been remarkable, with the market size rising by
three folds. Retail 4.0 is rapidly evolving to Online+Offline (O+O) retail models that will bring incremental economic contribution, job growth, and exports. To achieve this, a greater need for collaboration among retail stakeholders, policymakers, and supporting sectors for
tech-awareness will be the key, which will accelerate the sector’s growth in the years to come.”
As per the NASSCOM-Technopak survey of over 360 retail stakeholders, 79% of the
respondents strongly feel that technology will play a pivotal role in Indian Retail growth. There
has been a rising awareness and willingness to embrace online with 70% of the overall
respondents have a positive outlook towards Online+Offline collaborations.
Transformation in retail is driven predominantly by technology, which has not only influenced customer behaviour but also enabled the entry of new players, formalization of the value chain,
and cost and operational efficiencies. Macro-economic factors, such as demonetization in 2016,
GST reforms, and the black swan global pandemic event of COVID-19, have acted as catalysts
in the transformation of retail 4.0 led by an active interplay of tech solutions and digital-savvy consumers. The shaping of Retail 4.0 will entail new business models of collaboration with an
online plus offline approach to Retail.
Despite technological, operational, financial, and regulatory bottlenecks, the convergence of
Offline and Online retail has an enormous potential in terms of incremental economic contribution,
job growth, exports, and an inclusive retail ecosystem with greater participation of MSMEs. The Online plus offline model’s success requires constant support to MSMEs and traditional retail,
export promotion, and access to export markets. To achieve this, there is a greater need for a collaborative retail ecosystem, a coming together of Policy Makers, Traditional And Online
Retail Entities, and Supporting Sectors, such as financial entities to exploit and further grow
the opportunity presented.
UNI BM