Demand for essential commodities is likely to drive the revival of the retail sector in India, according to a report by Anarock Retail and the Retailers Association of India (RAI).
Titled ‘Indian Retail – Certainty Despite Headwinds’, the report showed that the average bill value for essentials has gone up 1.5 times after lifting of lockdown — from Rs 650 per basket in early March to more than Rs 900 per basket presently.
“Amidst the pandemic-induced slowdown, essential goods will fuel Indian retail industry’s growth in the coming quarters as consumer expenditure continues to remain focused on essentials, particularly food and grocery,” said a joint statement by Anarock and the RAI.
Food and grocery, followed by apparel, fast moving consumer durables (FMCD) and electronics, furniture and home furnishings and quick service restaurants (QSR) will see a “v-shaped” recovery within the next two to three quarters.
Other segments like beauty, wellness and personal care and home essentials may take 4-6 quarters to recover fully, it said.
As per the report, organised retail and e-commerce are on an upswing. Citing IBEF data, the report said that the share of Indian organised retail will double to 18 per cent in 2021, from 9 per cent in 2017. Likewise, e-commerce is expected to more than double to 7 per cent from the previous 3 per cent in the same period.
Anuj Kejriwal, MD & CEO of Anarock Retail, said: “Covid-19 will work as a catalyst for the growth of organised retail and e-commerce in India. Online spending is on a marked rise with online shoppers projected to increase from 15 per cent in 2019 to 50 per cent of the total online population by 2026.”
He added that in other new retail industry trends, omni-channel retailing is evolving rapidly with brands collaborating actively to enhance their reach and many are using malls or in-mall stores as urban warehouses to ensure a faster delivery to customers.
Kumar Rajagopalan, CEO, Retailers Association of India (RAI) said: “Omni-channel was gaining importance before the pandemic. The pandemic has enhanced the importance of retailers having an omni-channel strategy.
The pandemic has propelled consumers to purchase based on convenience either as delivery to home or by shopping at offline nearby stores or by time scheduled shopping, he added.