Evaluating India’s E-Commerce and Retail Industry

We analyze the growth of the e-commerce and retail industry in India and the business opportunities that it presents to potential investors and market entrants.

July 2022 , by Noah Imson

Last June 2022, Indian start-up Arzooo secured 70 million USD in its latest financing round, as per a report from Tech Crunch. Current estimations now have the company’s value at 310 million USD as it has raised approximately 80 million USD in total across several financing rounds. 

In its function as a business-to-business (B2B) retail tech platform that helps offline businesses expand their inventory by creating an expansive network, Arzooo is playing a significant role in the transformation of India’s retail industry. The start-up’s recent success is evidence that offline retailers can still thrive amid a growing and highly competitive e-commerce landscape.

Retail E-commerce in India
According to data from an article by Business Insider, India’s current retail spending per capita Is 590 million USD. Research from the same article also predicts that e-commerce penetration will eventually reach 15% by 2027, a development that will surely boost retail e-commerce sales in India. The rapid growth of the retail e-commerce sector in India can be attributed to several factors, such as consumer interest, technological accessibility, or even the conception of B2B retail services like Arzooo.

As a result of the accelerated development, this is an opportune time for interested parties to explore potential business ventures in India’s retail industry. The entry of new players into India’s retail landscape will be beneficial on several levels as it presents advantages such as improved consumer experience, potential partnerships with existing retailers, expanded service coverage, etc.

For example, while trends do suggest that e-commerce and online platforms will eventually become the primary retail option, there exists a gap in the market for offline businesses to connect with consumers online. Much like what Arzooo is currently doing for consumer electric goods, similar platforms may be developed with specific focuses or areas of retail in mind. These specializations can focus on creating a marketplace for a specific sector of goods, or they can even extend to catering to certain, hard-to-reach areas of India. 

Strategies to Enabling Retailers
Beyond the online activation of sellers and businesses in India, offline businesses can also explore other solutions to ensure that they remain competitive. Specifically, the application of technology in retail strategy should be an area of interest for all as it can address traditional challenges with a new perspective. 

For instance, retail analytics should be utilized as it provides useful insight into the ever-changing behavior of consumers. This also inevitably informs a business’ marketing and sales strategy. Some examples of technology being applied in the retail industry can include video analytics via CCTVs to observe foot traffic, and artificial intelligence and machine learning to analyze big data to reveal consumer patterns. Retailers who take advantage of such strategies will enable successful returns sooner rather than later. 

Given that India’s retail industry continues to grow via traditional channels and online spaces alike, there exist several promising investment opportunities. Be it to tap an underdeveloped part of the retail market, or to grow one’s business via technology, expect the retail landscape to continue to diversify itself through the efforts of domestic and international parties. 

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