Comments
With rising convergence of traditional and online channels establishing a digitally-enabled ecosystem and accelerated adoption of digital platforms by consumers, the online + offline retail (O+O) is expected to accelerate the growth of retail.
According to a report released by Nasscom and Technopak, online + offline enabled sales are pegged to touch the $640 billion-mark by 2030 making digitally enabled retail’s contribution to the overall Indian retail market at 43.4 per cent. This will also mean that the O+O retail model may contribute nearly $8 billion in incremental GST collection, accounting for 37 per cent of the total Indian retail industry’s tax contribution by 2030.
O+O market is defined as the sum of digitally-enabled retail stores including both traditional kirana and modern trade stores besides online retail convergence.
High potential
From an estimated $2.1 billion in 2020, O+O enabled exports have the potential to reach nearly $125 billion by 2030. In addition, the retail sector which is expected add 25 million new jobs over the next ten years, the reports estimates that nearly 50 per cent of these jobs will be supported by the online+offline model.
Speaking at the unveiling of the report, Amitabh Kant, CEO, Niti Aayog, said, “The retail sector contributed about 10 per cent to India’s GDP in FY 2019-20 and 8 per cent to the total workforce. Covid-19 pandemic has accelerated the adoption of online and offline play that will define the next phase of retail growth in the country. Going forward, technology will be the key driver of retail evolution in the future. The government is in process of formulating the National Retail Trade Policy which will not only create a conducive environment for retail trade but will also simplify policies hindering the growth of the sector in the country.”
Recommendations
Nasscom has recommended that to enable wider adoption of digital payments by MSMEs the policy makers should address key barriers and disincentive for adoption of digital payments. This includes measures such as providing MSME-specific tax relief and bringing parity between online and offline business on tax costs and compliances.
“Simplify the entire Principal Place of Business (PPoB) requirement especially for online sellers by making it digital so that they do not require physical presence to expand their reach outside their home state and by replacing physical principal place of business with a place of communication in the State,” it added. It has also suggested ‘single-window clearance’ approach should be followed for all requisite licenses and registrations associated with e-commerce in India among other measures for export promotion.
Debjani Ghosh, President, NASSCOM, said, “The Indian Retail industry performance in the last decade has been remarkable, with the market size rising by three folds. Retail 4.0 is rapidly evolving to Online+Offline (O+O) retail models that will bring incremental economic contribution, job growth, and exports. To achieve this, a greater need for collaboration among retail stakeholders, policymakers, and supporting sectors for tech-awareness will be the key, which will accelerate the sector’s growth in the years to come.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.