How India’s young consumers are driving growth in the retail industry

India’s fast-changing retail landscape has been witnessing robust growth in the last three years led by several factors, including evolving consumer behaviour.?The country will have nearly 357 million consumers under the age of 30 by 2030 , which means it is set to become the “largest young consumer” market in the world, according to a report by World Data Pro 2023, a global consumer insights and analytics platform.

Factors driving this trend

Country Manager — India Pakistan Bangladesh at Falabella and LinkedIn Top Voice Alpana Razdan , attributes this to the rise in income and thereby, an increase in the purchasing power of young consumers. She also says that more young people are migrating to cities for better opportunities, creating a concentrated market for retail growth.?

The potential rise of?India?as the largest young consumer market in Asia will create an opportunity for market expansion and growth, says Navdha Juneja ?? , Founder of NeutraLeaf India.

“It will not only attract domestic but also international players to invest in India’s retail sector,” she adds.

In fact, nearly 24 global brands are likely to enter India this year. Therefore, by understanding the needs of young consumers and adapting businesses accordingly, retailers can tap into this growing market and generate significant revenue, says Head of Ecommerce at Beetel Teletech Limited and LinkedIn Top Voice Himanshu Srivastava .

What does it mean for the retail industry overall?

The emergence of the young consumer market has also been responsible for driving various trends. For instance, more consumers in India are now leaning towards buying premium products, says a recent report by The Economic Times . The report also adds that it has prompted many companies to revise their product portfolio, with a primary focus on the luxury segment in the last two years.

Brands are now also adopting new ways to attract and retain Gen Z consumers. But due to their lower disposable incomes, retention is a challenge, says a report. Therefore, companies are revamping their strategies by launching products at entry-level prices, partnering with fast-fashion brands, and introducing new categories in the sneakers and streetwear segments.

“Young consumers are also demanding experiential shopping and socially responsible brands,” says Razdan.

Retailers must create immersive retail environments and prioritise sustainability to cater to their preferences, she adds.

Retail gets tech-savvy

Brands are now focusing on seamlessly blending online and offline experiences to provide a unified shopping journey that will enable customers to seamlessly switch between digital platforms and physical stores, says Anushka Kotwani ,?Lead — Community & Brand, PeerCapital. “From immersive virtual showrooms to click-and-collect options, convenience is the new currency,” she adds.

Enhanced digital infrastructure and increased smartphone users have led to 1.35 billion potential customers in the retail industry , according to a Deloitte-Ficci report. This has prompted brands to incorporate more technology to improve customer experience. In this regard, Juneja says, “One of the cutting-edge technologies that is reshaping the retail industry is voice assistant. Apart from this, augmented reality also helps customers visualise products, helping them understand if the product is suiting them or not.”?

Power of social connections

Nearly 50% of Gen Z consumers are more likely to purchase a product if it is recommended by a peer. Millennials and Gen Z consumers value authentic connections and peer recommendations, says Dr. Sanchit Misra?? , LinkedIn Top Voice and Management Trainee, DFM Foods Limited. He adds that, more retailers are therefore, building communities around their brand, encouraging user-generated content, and creating platforms for consumers to share their experiences and opinions.

“Fostering a sense of community, retail companies can create a loyal customer base that feels connected to the brand on a deeper level,” Misra says.

Leveraging these trends will help in the overall growth of the sector. A recent report by The Economic Times adds that it will also lead to more infrastructure development, ease of doing business, entrepreneurship, and creation of jobs.

When it comes to the most in-demand job roles, Aman Gupta , the co-founder and CMO of BoAt Lifestyle says that along with store managers, supply chain experts, ORM professionals, and virtual merchandisers, the value of sales executives and offline marketers can never be overlooked in driving business for a retail brand.

Kotwani says, “The future of Indian retail is incredibly promising, and companies that embrace these trends will stay ahead of the curve. By catering to the needs and desires of the young consumer market, adopting innovative technologies, and fostering sustainable practices, retailers can thrive in this dynamic landscape.”

What are the top trends shaping India’s retail and FMCG industry? LinkedIn Top Voices share their take?here .

Reported by:?Divya Pathak

Creator manager:?Rakshit Ravindranathan