India’s retail sector is on a massive growth trajectory, with the market expected to exceed $1.6 trillion by 2030, according to a recent report by Redseer Strategy Consultants. Despite this booming expansion, the sector remains highly fragmented, with regional and unbranded players set to control over 70% of the market.
While essential categories will continue to dominate consumer spending, discretionary spending is expected to drive the next wave of expansion. With rising disposable incomes and evolving preferences, demand for non-essential goods is increasing, forcing brands to innovate and offer premium products and experiences to capture the shifting market.
One of the defining characteristics of Indian retail is the sheer diversity in product preferences, leading to an extensive range of Stock Keeping Units (SKUs). The report highlights that categories such as sarees, home decor, toys, spices, and makeup require a wide variety of SKUs to meet localised demand. This SKU proliferation further underscores the challenge of supply fragmentation, making national-scale expansion difficult for brands. Currently, only around 350 brands in India have crossed the $100 million revenue mark—just one-eighth of China’s 2,800 brands.
General Trade (GT), consisting of small, independent retailers, continues to dominate Indian retail due to its accessibility and deep understanding of hyperlocal consumer preferences. However, GT faces structural inefficiencies, including inconsistencies in pricing, availability, and standardisation. While it effectively caters to small-ticket transactions and region-specific demands, its informal operations and fragmented supply chains lead to inefficiencies that limit growth and scale.
In contrast, organised retail—both online and offline—is rapidly gaining ground by addressing these inefficiencies. With its market share expected to reach $600 billion by 2030, organised retail is projected to account for over 35% of total retail in India. Companies are leveraging advanced sourcing strategies, digital technologies, and infrastructure innovations to streamline operations, improve supply chains, and enhance customer experience.
To effectively serve India’s heterogeneous consumer base, organised retail models are evolving around three core principles: assortment, value, and convenience. Unlike traditional retail, these models are designed to cater to a broad spectrum of customers while coexisting with the GT-led distribution system. By balancing variety and affordability, organised retail players can tap into the growing demand for structured and reliable shopping experiences.
“Scaling ahead will require organised retail models to also address the regional and unbranded consumption, in addition to the branded segment that they’ve traditionally targeted. Offline & online players are adopting a mix of strategies, such as backward integration, private labelling, and supply aggregation, to target this opportunity,” Kushal Bhatnagar, Associate Partner, Redseer, said.
The report further highlights that organised distribution networks are now outpacing the growth of legacy pan-India brands, shifting market power in favor of retailers with structured supply chains. To capitalise on this trend, companies must integrate regional and unbranded products into their offerings, reaching a wider consumer base beyond premium branded goods.
To strengthen their foothold, both online and offline retailers are adopting strategies such as backward integration, private labeling, and supply aggregation. These approaches help companies optimise supply chains, reduce costs, and expand product availability while catering to India’s highly fragmented market.