New Delhi: According to a recent report by Wazir Advisors, India’s value retail market, excluding food and grocery, is expected to surge to $170 billion by 2026, surpassing the overall retail sector’s growth rate. The report states that this segment will grow at a compound annual growth rate (CAGR) of 15% between 2023 and 2026, outpacing the projected 10% CAGR of the retail sector as a whole.
The study highlights that apparel dominates the value retail category, followed by furniture, beauty and personal care, and footwear. In recent years, major value retailers have expanded their presence in smaller cities, following the success of Trent’s Zudio. Retail giants like Reliance Retail’s Yousta, Aditya Birla Fashion & Retail Ltd’s Style-Up, and Shoppers Stop’s InTune have entered the value apparel sector, focusing on affordable clothing, footwear, and accessories.
Despite the entry of organised players, the value retail market in India is largely controlled by unorganised retailers, who accounted for 79% of the market share in 2023, offering unbranded products at low prices. The organised retail sector, comprising both physical and digital formats, represents 21% of the market.
Pakhi Saxena, head of retail and CPG at Wazir Advisors, emphasised that accessible pricing is the key to success in the value retail segment, targeting the mass, economy, and mid-economy segments.
While organised retail has primarily focused on metro and tier 1 cities, smaller cities are expected to drive future growth through digital channels. E-commerce platforms like Amazon, Flipkart, and Snapdeal are expanding their presence beyond major cities.
The report also highlights the evolution of the value retail market in India. From 1995 to 2010, retailers like Shoppers Stop and Westside gained prominence, catering to mid-to-premium brands in metropolitan areas. The period from 2010 to 2015 witnessed the rise of value-oriented retailers, such as M-Bazaar and Citi Style, targeting tier 2 and 3 markets. This shift resulted in the segmentation of value retailers into national and regional players in the fashion segment.
Value retail stores, with an average transaction value ranging from 500 to 2,500, are primarily located in tier 3 cities and smaller towns. These markets account for approximately 50% of the presence of value retail stores in India.
Despite the challenges posed by the pandemic, retailers like Vishal Megamart, Style Bazaar, and V Bazaar have maintained a robust CAGR of over 15% from 2018 to 2022, demonstrating the resilience of the value retail sector.
In conclusion, India’s value retail market is poised for significant growth, driven by the expansion of organised players and the increasing focus on smaller cities and digital channels.
