India’s retail market size expected to reach ₹91 trillion by 2025; fashion footwear to contribute over 25%: Economists

India is becoming a favorable market for fashion retailers. Factors like increase in income levels, improvement in consumer behavior, increase in demand from Tier 3, Tier 4 cities and rural markets, increase in youth spending led to growth in the Indian footwear industry.

Indian rupee notes
(Image: MeelBijendra/Gitika)

India’s retail market size was ₹55 trillion in 2020, growing at a CAGR of 5% over the last 4 years. According to industry economists, fashionable footwear will contribute more than 25% of the market by 2025. The global footwear market is valued at over USD 220 billion. India has become a focal point for fashion and lifestyle businesses over the years due to rapidly increasing disposable income.

Although India is the second largest footwear producer, it is still under-penetrated with per capita consumption of around 1.7 pairs per year compared to the global average of around 3 pairs.

The Indian footwear industry was seriously hit by the COVID-19 pandemic due to the closure of outlets, preference for work-from-home, and change in consumer behavior towards discretionary spending.

Consumers were apprehensive about stepping out of their homes even after the lockdown was lifted, leading to a 14% decline in the size of the retail market in 2020.

The increasing penetration of smartphones and internet connectivity is further propelling footwear sales as e-commerce is the fastest-growing channel in India and is expected to reach USD 350 billion by 2030.

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However, factors such as the rate of economic growth, inflation, regulatory and taxation changes, etc. continue to impact the growth trajectory of the Indian footwear market.

According to industry economists, the retail market is expected to grow at a CAGR of 11% to reach Rs 91 trillion by 2025.

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