India’s retail market to surpass $2.2 trillion by 2030, 90% sales to be offline: Report

According to a report by Accel, Fireside Ventures, and Redseer Strategy Consultants, India's retail market is projected to exceed $2.2 trillion by 2030, with approximately 90% of sales expected to occur through offline channels. The report emphasizes the need for brands to adopt an omnichannel strategy, as consumers are increasingly navigating across various channels throughout their purchase journey.

According to a report by Accel, Fireside Ventures, and Redseer Strategy Consultants, India's retail market is poised to cross $2.2 trillion by 2030, with approximately 90% of sales expected to occur offline. The report also finds that a substantial portion of all purchases will be influenced by what consumers see online across various product categories.

The report, titled 'The Decoding Omnichannel: Strategies for D2C Brands', reveals that Indians conduct nearly 24 billion online searches annually to learn more about products before making a purchase. Furthermore, 60% of the total value is concentrated in the food and grocery sector, followed by fashion and lifestyle.

The report states that consumers are moving across various channels at different stages of the purchase funnel. They are increasingly searching across categories before making an online purchase, and brands must be present where their customers are. For instance, in sectors like jewelry, customers may browse online, but ultimately make their purchases offline in stores, after accurately assessing factors like fit and style in person.

“We’ve seen the journey of Indian consumer brands over the last decade and a half where a lot of pioneer brands and platforms established online as a viable channel. With that accomplished, the players are evolving towards the next step of broadening their focus by serving consumers where they are, be it online or offline. One prominent example of this would be Mamaearth, which having started as an online D2C brand, is driving a significant chunk of its topline from offline retail stores. While some brands have shown the way, brands/platforms will have their unique journeys as they move omnichannel/multi-channel and that’ll include nuanced decisions on channel strategy across the consumer journey based on the product category and consumers’ maturity,” said Anil Kumar, founder and CEO of Redseer Strategy Consultants.

According to the report, direct-to-consumer (D2C) brands are well-positioned to leverage omnichannel strategies across different product categories. These brands have already mastered online retail, and can now use product innovation, data-driven marketing insights, and technological capabilities to further scale their offline channels as well.

“The fusion of online and offline presence is distinctly Indian, reflecting the unique preferences and behaviors of Indian consumers. It bridges trust and convenience barriers, accommodating a shopping journey characterized by a mix of traditional values and modern conveniences. Agrostar, for instance, delivers an omnichannel experience to farmers in rural India, who both embrace the convenience of online ordering and still value the tactile experience and personal interaction of in-store pickups,” said Prashanth Prakash, Partner at Accel. “While the first generation of omnichannel brands focused on building omnichannel technology, the next generation will introduce new, uniquely Indian business models and solutions.”

The report suggests that while there is no universal solution, the need for a blended online and offline experience is particularly relevant in the Indian context. This combined approach helps to bridge trust and convenience barriers that standalone strategies may face, and provides customers with a shopping experience tailored to their specific needs.

Kanwaljit Singh, Founder and Managing Partner of Fireside Ventures, said, “For every Sweet Karam Coffee that leverages q-commerce as a discovery channel, there’s a boAt that uses it to drive e-commerce bestsellers front and centre. While no single formula works across categories, we have several learnings to share. We believe consumer brands should be omniprepared for omnichannel. The report, ‘Decoding Omnichannel strategy for D2C brands,’ in collaboration with Accel, includes frameworks and learnings from digital-first brands who have done this before, and blind spots to avoid before taking the plunge.”