Budget 2023-24 wishlist: Here are the key challenges in retail sector

Retail

While the retail sector is expected to grow at 8 per cent CAGR by 2027 (estimates), growth CAGR for e-commerce will be at 24 per cent. High e-tail potential over the next decade is driven by following factors:

• Large consumer markets and one of the youngest demographics

• Large and growing internet and smartphone penetration enabled by low data prices

• Low and steadily declining unit shipment costs

 

Key challenges

• With input cost pressures showing signs of moderation, driving volume uptick will become key across FMCG players

• Industry players will need to reconfigure existing market strategies with an increased focus on digital front ends, while evaluating which model best suits business

• Firms will need to build operating models that cater to diverse consumer propositions

• Capability will need to keep pace, both in brick-and-mortar, and digital worlds

• Companies in the sector will need to innovate at scale and deploy new ways of working to not only reduce carbon and water footprint but also recycle and reuse packaging

Industry ask

• To simplify rules governing retail operations across India and facilitate growth of viable retail operations

• The government may consider expanding the PLI ambit to categories like footwear, toys, etc

• The government may consider rationalising the individual tax rate to increase disposable income in the hands of the consumers