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India’s omnichannel business could swell five times, to $55 billion, by 2027, up from about $11 billion at present, according to the latest report by IMAGES Group’s India Phygital Index 2022.
The report, jointly conducted by IMAGES Group in association with One Consulting Firm and GreenHonchos, features an elaborate study of more than 100 brands in various retailing sectors, including food and grocery, food services and hospitality, fashion and lifestyle, home improvement, beauty and wellness, and consumer electronics among various other segments.
“Currently, retailers are deriving about 13% of their sales or US$11.2 billion from e-commerce/ omnichannel. This has the potential to grow 5 times to US$ 55 billion by 2027,” said the report released Wednesday during the latest edition of IMAGES Group’s Phygital Retail Convention (PRC) that is being held in Mumbai between August 24 and 25.
“From the standpoint of retailers, it can create tremendous value-capture higher share of wallet, achieve better sell throughs as the store’s inventory is exposed to customers at a national level, reduction of broken size problem, reduction in the level of inventories as retailers can fulfil from anywhere so safety stocks can be significantly reduced,” the report added.
It also revealed that online sales account for approximately 13% of national-level retailers’ retail revenue. While the fashion and consumer electronics companies have taken the lead in this space, food and grocery operators are “lagging” in this area.
Nonetheless, the national retailers have made rapid progress in adaptation of omnichannel retail in recent years, especially buoyed by customers gravitating to purchasing online during the pandemic years.
“Only a few years ago, this was regarded as a mere buzzword, with much scepticism,” the report said. “Today, over 60% of national brands use one or other form of omnichannel. The rapid evolution of the ecosystem – SaaS-based technology service providers and logistics players – has significantly aided in this,” it added.
The Phygital Index analyses the maturity on five parameters listed in the report to comprehensively capture the state of omnichannel maturity. “The industry’s overall score is 47.7%, which is a reasonably good score given that the real push toward omnichannel came in the last couple of years,” the report released Wednesday said. “The industry has scored very well to have the share of e-commerce at 13% of total revenue, in offering rich features such as click and collect, ship from stores, etc., and in making technology advancement. We call this stage “Partially Connected Omnichannel” because the customer journey isn’t always smooth or consistent or seamless across all channels,” it revealed.
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