India’s retail sector is set to exceed $1.6 trillion by 2030, offering immense growth potential for brands and businesses. According to a recent Redseer report, while essential categories will continue to drive the majority of spending, discretionary spending is expected to lead the next wave of expansion. However, despite this remarkable growth, the supply landscape remains highly fragmented, with regional and unbranded brands projected to account for over 70% of the market by 2030.
The report highlights that India’s diverse consumer preferences, high price sensitivity, and complex supply chains have contributed to this fragmentation. Unlike China, where around 2,800 brands have surpassed the $100 million revenue mark, India has only about 350 such brands, showcasing the difficulty in scaling businesses at a national level. Factors such as cultural diversity, local taste variations, and extensive SKU requirements in categories like sarees, home decor, toys, spices, and makeup further add to this challenge.
General trade (GT), which has long been the dominant force in Indian retail, continues to thrive due to its accessibility, affordability, and ability to cater to hyper-local preferences. However, inefficiencies in the value chain, informal operations, and lack of standardization often lead to suboptimal pricing, limited product availability, and inconsistent consumer experiences. In contrast, organized retail, both online and offline, is rapidly gaining traction, addressing these inefficiencies through technology integration, improved sourcing strategies, and enhanced supply chain management. As a result, organized retail is projected to exceed $600 billion by 2030, capturing over 35% of the total market.
“Scaling ahead will require organized 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.”, said Kushal Bhatnagar, Associate Partner, Redseer Strategy Consultants.
With the rise of organized retail, market power is shifting away from traditional, legacy brands towards structured distribution networks. To sustain this momentum, organized players must tap into the vast unbranded segment alongside conventional branded offerings, allowing for deeper market penetration. The retail landscape is also witnessing the emergence of multiple retail models, evolving in response to consumer demands for assortment, value, and convenience.
As organized retail outpaces the growth of legacy brands, companies must adapt by strengthening their supply chains, leveraging digital innovations, and enhancing consumer engagement strategies. The report underscores the need for brands, policymakers, and industry stakeholders to embrace transformation to remain competitive in India’s rapidly evolving retail sector. Businesses that successfully navigate fragmentation, consumer diversity, and supply chain complexities will be well-positioned to lead the next phase of India’s retail evolution.