The market size of online sale of goods and services, or e-tailing, in India is estimated to grow to $56 billion by 2023 from the current $1 billion, according to industry experts.
“Despite persistent economic pressure and slowdown in India, merchandise retail will continue to witness sustained growth. E-tailing will emerge as a key retail channel, which will drive the growth of corporatised retail,” Technopak vice-president Ankur Bisen said at a retail summit in Mumbai on Friday. The size of e-tailing is estimated to grow from the current $1 billion to $56 billion (in real terms) by 2023, when it will account for 6.5% of the total retail market, driven by an ecosystem favouring the e-tailing market, Bisen said.
An increasing share of incremental merchandise retail will come from urban and semi-urban centres. Apart from them, the demand will also come from the emerging towns and clusters where primary source of livelihood has moved from agriculture to other professions, he added.
The retail chain will continue to face structural issues encompassing real estate, labour, sourcing and supply chain that will not allow corporatised brick-and-mortar retail to grow beyond the stated estimate, Bisen said.
Future Group CFO CP Toshniwal said, “The industry is largely dependent on the categories of retail such as grocery. Retail business has low margin and high volume whereas lifestyle retail has high margin and low volume. FDI will not improve the fortunes of the Indian retail business.”
Clothing Manufacturers' Association of India president Rahul Mehta said, “Indian retailers would evolve their own strategy and any amount of FDI will not have any impact on the domestic industry.”
According to the business head of Gitanjali Group, Rahul Vira, foreign jewellery designs and brands are not viable in India since people here prefer to have their own products mainly during marriages and festivals. “Foreign products cannot meet the aspiration of Indian customers,” Vira added.