The Offline Online Conundrum

Samir Alam digs deep into the camaraderie between online and offline sales in the textile and apparel industry and how it affects business on the whole.

Consumer retail in India is one of the fastest growing markets in the world. According to the India Brand Equity Foundation, India is also the fifth largest preferred retail destination in the world, with a Compound Annual Growth Rate (CAGR) of nearly 17 per cent over 2015-2020. These estimates project the USD 630 billion retail sector (2015) to reach well beyond USD 1.3 trillion by 2020, ballooning the overall national consumer spending figures to USD 3.6 trillion.

However, despite the general optimism and upward trends being observed over the past few years, the debate of the times remains the inherent conflicts and competition between old-school traditional retail model and the emerging power of online retail platforms. There have been numerous theories on how this struggle will play out with the ever increasing reach of internet penetration and mobile technologies, but there has yet to be a decisive outcome. Is the competition between the two a zero-sum game where only one will triumph over the other or is the reality more complex? We take a look at the landscape of offline and online retail in India and present our findings.

GROWTH ON ALL FRONTS 

The first half of 2016 showed us that investment in the retail sector reached the highest levels since 2008. With nearly USD 512 billion in private equity flowing into this sector there remains no doubt that market optimism is high. This is an especially fair conclusion since the retail industry in India was approximately USD 3 billion in 2014 and has already reached USD 30 billion in 2016, with further projections of it reaching to USD 100 billion in 2020.