The organized retail sector includes supermarkets, hypermarkets, departmental stores, convenience stores and others. They offer a wide range of products under one roof with standardized quality, scales of economy, competitive prices and superior shopping experience to customers. Some global retailers operate in this market through physical stores as well as e-commerce platforms offering a seamless omni-channel shopping experience. The organized retail industry has witnessed an upsurge in recent years with increasing disposable incomes, rapid urbanization, evolving consumer preferences towards branded products, dual income households and rising internet penetration in emerging nations.

The global organized retail Market is estimated to be valued at US$ 28.34 Bn in 2023 and is expected to exhibit a CAGR of 4.2% over the forecast period 2023-2030, as highlighted in a new report published by CoherentMI.

Market Dynamics:

Rising disposable incomes: With increase in economic growth and job opportunities, disposable incomes of individuals have been rising significantly across developing nations. This provides organized retail chains to tap into this consumer base with high spending power on discretionary and branded products. According to World Data Lab, disposable incomes per capita globally are expected to surpass US$ 20,000 by 2030 from US$ 12,000 in 2020.

Rapid urbanization: Massive rural to urban migration has led to urbanization at accelerated pace in past few decades. As of 2020, over 55% of world's population resides in urban areas compared to 34% in 1960. Urban population offers huge potential for organized retail stores owing to higher brand consciousness, buying preferences for high quality goods and changing lifestyles. India and China are expected to add over 500 million urban dwellers between 2020-2050.

SWOT Analysis:

Strength: Organized retail provides consumers with a wide range of products under one roof. This makes shopping more convenient. Having well-known brands also helps organized retailers attract customers. Centralized procurement allows organized retailers to negotiate better prices from manufacturers and importers.

Weakness: High rents in prime locations increase operating costs for organized retailers. Maintaining uniform quality and service levels across multiple stores is challenging. Dependence on a few key suppliers can impact procurement if relationships sour.

Opportunity: Growth of shopping malls and strong economic growth in Tier 2 and Tier 3 cities present new expansion opportunities. Rising disposable incomes will drive demand for quality products. Developing cold-chain infrastructure can help organized retailers sell perishables.

Threats: Unorganized retailers are very cost-effective due to low rent and overheads. They offer personalized services. Local producers and artisans also pose competition. Economic slowdowns negatively impact consumer spending on non-essentials.

Organized Retail Market Segmentation:

  • Global Organized Retail Market, By Product Type
  • Electric
  • Food
  • Consumer
  • Other
  •  Global Organized Retail Market, By Application
  • Personal
  • Commercial

Key Takeaways:

The global Organized Retail Market Size is expected to witness high growth. The market size is estimated to reach US$ 28.34 Billion by 2023 registering a CAGR of 4.2% during the forecast period.

The growing middle class and rising disposable incomes will drive consumer spending in Asia Pacific. Countries like India and China are expected to see the fastest growth in organized retail supported by growing penetration of retail chains and preference for branded products.

Key players operating in the organized retail market are Amazon, Apple, eBay, Flipkart, Future Group, Landmark Group, Pantaloons Retail, Reliance Retail, Shoppers Stop, Tata Group and Puma. Amazon and Flipkart account for a major share in the online retail segment. Offline, Reliance Retail and Future Group are rapidly expanding through acquisitions and new store launches. Regional players like Landmark Group are also strengthening their regional presence. The market is expected to witness increased consolidation activities in the coming years.

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