Rolex operates authorized outlets in Cochin and Coimbatore, while Zara has stores in Jaipur and Lucknow. Starbucks boasts about 500 shops across India, with a goal to double that to 1,000 by 2028 under the leadership of CEO Sushant Dash. This rapid growth highlights the changing landscape of lifestyle, fashion, and luxury in India, where 1.4 billion people are increasingly turning to these products, as noted in recent surveys by FICCI and Local Circles. Almost 90% of Indians purchase some lifestyle item each year, whether online or offline.
Deloitte forecasts that by 2030, India’s retail sector will soar to $1.93 trillion, with e-commerce making up 60% of that figure. The transformation in retail reflects our quest for convenience and modern technology, evolving from traditional bazaars to today’s quick-commerce models powered by AI. This shift has created a cultural blend where younger generations, especially Millennials and Gen Z, have different purchasing motivations, prioritizing sustainability and pre-loved products.
Interestingly, demand is surging in Tier 2 and Tier 3 cities. These areas account for 45% of the need for international apparel and lifestyle brands. For instance, Ethos Watch Boutique reports rising sales in cities like Mangalore and Raipur. CEO Pranav Saboo attributes this to aspirational consumption and competitive pricing. Ethos plans to expand to 150 stores in these smaller markets over the next three years.
Even global restaurant chains like Nando’s are shifting focus to Tier 2 cities, aiming for 150 new locations across India in the coming decade. KPMG reports a 22% annual growth rate in lifestyle segments in these areas, fueled by a young population with increasing disposable income.
Despite this growth, the organized retail presence remains low, pushing consumers toward online shopping. However, companies recognize the importance of physical stores for the tactile shopping experience. Brands like Uniqlo and Reliance are keenly eyeing these markets for expansion due to lower operational costs, making them quicker to achieve profit.
Yet, there’s a flip side. The growing middle class is often caught in a cycle of debt, with many allocating 29% of their income to fashion and lifestyle products, as revealed by a PWC report. This “Middle Class Trap” raises concerns, even as disposable incomes rise.
The views in this article reflect ongoing trends in retail, illustrating how rapidly changing consumer behavior shapes the market.
Authored by Prof. Dr. Jyoti Sankar Das, Birla Institute of Management Technology (BIMTECH), Greater Noida.
Disclaimer: The views expressed are those of the author and do not necessarily reflect the views of ET Edge Insights or its members.
