Internet penetration in rural India to push retail industry

The CII Report says retail industry is expected to touch US $ 2.1 trillion by 2025 and collaboration between organised, unorganised and online would be the game changer rn
Internet penetration in rural India to push retail industry

Apex industry body, Confederation of Indian Industry (CII) has envisaged that the retail market in India will touch US $ 1.2 Trillion by 2020 and US $ 2.1 Trillion by 2025 from the present level of US $ 550 billion, generating 10-12 million jobs in coming decade.

“It is estimated there would be 550 million net users in India by 2018, as also the face of the Internet user will change dramatically, with higher penetration to the tune of 210 million in rural areas. The online retail would provide a superb platform to the unorganised retail to reach out to the consumers across markets in tier 3 & tier 4 cities”, a Report on retail released here today by CII said.

“Time is absolutely opportune to ‘Make in India for Retail in India’, with our country being one of the fastest growing and most dynamic retail markets in the world. We must produce and sell in India,” Adesh Gupta, Chairman, CII Retail and Promoter, Liberty Group said.

“There is however a dire need to strengthen our supply chain management, identification of the consumers’ needs, trained and skilled manpower and streamlining of our taxation system”, he added.

It is expected that India’s e-commerce market will grow from US$ 2.9 billion in 2013 to over US$ 100 billion by 2020. There is enough demand, and the challenge would be how to reach the consumers, both from connectivity and logistics perspective.

“The online retail can reach Tier 4-6 areas much better than offline channel, giving it a bigger advantage. Collaboration between both organized and unorganized retail companies could be the real game changer”, Gupta said.

According to the Report on Retail, the organized retail in India is expected to grow 7 folds and online retail 26 folds and the unorganized retail will continue to dominate.

The Report highlighted that the sector will get a transformational push with an aggressive collaboration between the organized, unorganized and online retail growth.

“The growth will be driven by India’s demographics with huge young and tech savvy population (500 million below 25 years), rising incomes and demand levels, urbanisation, attitudinal shifts and above all, a phenomenal and continuous rise in internet penetration across the country with the government’s commitment to digitisation,” it said.


“E-Commerce is probably creating the biggest disruption in the retail industry and this trend will continue in the years to come. Almost everything is sold on the internet now and this means that pretty much all of the retail industry faces the challenge of either being a part of e-commerce or taking it head on. Partnering is the best way out”, shared Shreekant Somany, Chairman, CII North.

“It is imperative that the retailers take advantage of digital retail channels (e-commerce), which would enable them to spend less money on real estate while reaching more customers in tier-2 and tier-3 cities," said Mukesh Mathur, Executive Director, Oracle India.

Harminder Sahni, Managing Director, Wazir Advisors Ltd shared that ,“The profitability of the retailers is a major issue these days. The companies should concentrate on opening profitable stores, with thrust on hiring trained manpower. Both online and offline must work together”.

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