By Jyoti Sankar Das
The lifestyle ecosystem is fast engulfing India’s 3.3 million sq km geographical spread and the 1.4 billion population residing in it. As per reports by the FICCI and Local Circles Surveys, nearly 90% of India’s total population engages in buying some lifestyle product in a year. The latest Deloitte report suggests that India’s retail sector would reach $1.93 trillion by 2030 from $1.06 trillion in 2024. 60% of this via online commerce. The lifestyle and experiential spending is on the rise.
Evolution of retail
The evolution of retail has been a function of convenience and technology. From the bazaars and open-air markets to the mom and pop stores, to e-commerce and now quick commerce (q-commerce), it’s always about the pursuit of comfort and application. The cultural concoction of the East with the West, with technology accelerating the assimilation has led to hybridisation. There has therefore a disruption at the need and want stage among Indian youngsters whose buying value motivations are more similar to their western counterparts. The Gen Z in these smaller cities and towns of are far different from their metro counterparts in terms of a much higher aspirational value, modern education, and exposure to lifestyle and fashion products.
The growth of retail has been an answer to the fulfilment of the wants and desires of consumers. Today, the demand is coming largely from the smaller cities. 45% of the total demand for global apparel and lifestyle brands comes from these cities. 55% of the total revenue of Tata CLIQ Luxury, and 42% of Luxe polis Pre-loved luxury platform come from these markets.
Young and upwardly mobile population
As per the reports of KPMG and Technopak (now The Knowledge Company), there is a strong growth rate of nearly 22% CAGR in the lifestyle segments in such cities. A young and upwardly mobile population, higher disposable income, increased discretionary spendings and faster digital adoption are key drivers for the expanding lifestyle retail footprint in these regions.
With this surge in lifestyle demand, how will traditional retail change? To say that online would replace traditional offline retail completely is an exaggeration. ‘Phygital’ seems to be the way forward for global brands to reach smaller cities. Most traditional lifestyle
product stores are now reaching out to consumers through their websites. Decathlon has opened stores in states like Assam, Bihar, Goa and Uttarakhand and also given the option for click and collect and home delivery. Levi’s offers options for omnichannel retailing
in Trichy and Ludhiana. Currently, Ikea has three big format stores in Hyderabad, Navi Mumbai and Bengaluru, apart from some small format stores. They have a team that looks into home and modular kitchen furnishing options in cities like Bhubaneswar.
They have a tie-up with Urban Company, which sends its local carpenters for accurate measurements, and there is a virtual consultation leading to servicing the home furnishing needs in smaller cities.
The next development is the penetration of q-commerce into the hinterlands of India where the mom and pop stores are being
converted into dark stores, reducing fixed costs and response time. Needless to say, AI, ML and IoT adoption will change traditional lifestyle retail to deliver experiential and convenience value to the Tier 2 & 3 aspirational consumers.
The author is an associate professor, Practice (marketing and retail), BIMTECH