Indian retail to notch USD 2-tn, bets big on packaging

A report by Boston Consulting Group and Retailers Association of India predicts this growth is fueled by a confluence of factors: rising disposable incomes, a shift in consumption patterns, and an increasingly experience-driven customer base.

India's booming economy sets the stage for significant retail growth, with the sector expected to surge by 9 to 10% in the coming decade. This growth places the retail industry's current valuation at approximately USD 820-840 billion, offering immense potential for businesses.

However, recent trends paint a slightly dull picture. While the broader economy surges, certain segments like fashion, electronics, and even quick service restaurants have witnessed a decrease in demand. This has led retailers to rethink their strategies and identify new growth avenues.

In this retail arsenal, packaging acts as a strong weapon. It transcends its traditional role as a mere protective barrier and transforms into a powerful marketing tool and a catalyst for customer experience. 

Retailers are now strategically leveraging packaging to entice consumers with eye-catching designs and innovative formats on crowded shelves, besides communicating with clear, concise labelling. 

Tier-two and -three cities are brimming with aspiring consumers who represent an untapped market potential. Improved infrastructure like arterial highways is urbanising smaller towns, driving consumption growth in these regions.

At the other end of the spectrum, a booming stock market and increasing property values have led to a wealthier population with a growing appetite for luxury brands. This increased affluence is reflected in a surge in indulgence spending on leisure, entertainment, and premium products.

To cater to these diverse consumer segments, retailers are adopting a multi-pronged approach, expanding their presence with smaller format stores across various locations.

In this direction, the market can see product packaging with enhanced convenience, easy-to-open features and portion control options that cater to the needs of today's busy consumers. Also, the packaging promotes sustainability with eco-friendly packaging materials and responsible disposal instructions resonate with environmentally conscious consumers.

Beyond aesthetics, packaging plays a crucial role in ensuring product safety and quality. This is especially crucial in food and pharmaceutical segments, where tamper-evident features and strict regulations demand unwavering attention to detail.

As India's retail landscape evolves, packaging will continue to play a central role. And, retailers can unleash its full potential to capture the hearts and minds (and wallets) of the discerning Indian consumer.