Retail Sales Surge in India Amid High Disposable Incomes, Rising Consumption
India has witnessed a notable surge in retail sales, with a 5% increase in June, fueled by higher disposable incomes and escalating household consumption expenditure. The Retailers Association of India (RAI) highlights that the southern region of India led the growth with a 7% rise, while the northern and eastern regions each saw a 5% increase. Western India recorded a 4% uptick in retail sales.
The growth has been particularly robust in the footwear and apparel sectors, both showing a 4% increase. Kumar Rajagopalan, CEO of RAI, is optimistic about the future, stating, “With the upcoming festival season and a promising monsoon, we anticipate further improvement in consumer sentiment and retail sales”.
The survey indicates strong performance across various sectors, with discretionary items seeing a boost due to end-of-season sales. This trend aligns with broader data showing rising household consumption expenditure in both rural and urban areas.
According to the Ministry of Statistics, per capita household consumption in rural India increased by over 40% in 2022-23, after adjusting for inflation. Monthly per capita expenditure in rural areas rose to Rs 2,008, up from Rs 1,430 in 2011-12. Urban India also experienced significant gains, with per capita expenditure climbing 33% to Rs 3,510 from Rs 2,360 over the same period.
In the first half of 2024, retail startups in India attracted 32% more funding compared to the same period in 2023. Funding for the retail sector surged to $1.63 billion from $1.23 billion, according to data intelligence firm Tracxn.
A recent UBS report underscores the scale of India's consumption growth, noting that consumption in the country has nearly doubled over the past decade. Last year, India's consumption growth outpaced other major economies, including China, the US, and Germany, highlighting the robust expansion of the retail sector in the region.
