India's retail boom is fading after a post-pandemic surge. Sales growth has slumped across categories, with even established brands like Zara and Manyavar experiencing sluggish performance.
This slowdown is attributed to several factors. Consumers, burdened by the increased use of EMIs for big-ticket purchases, have less disposable income for discretionary spending.
The initial pent-up demand post-pandemic has been satisfied, with high growth rates from the previous year unsustainable.
Additionally, direct-to-consumer (D2C) brands are stealing market share, particularly in fashion. While cautious spending, especially in Tier II cities, may persist for a few quarters, experts see potential for recovery.
Growth in the electronics and beauty categories remains healthy, and a focus on innovation and adapting to D2C competition could lead to a better second half for the industry.
Overall, the Indian retail sector is at a crossroads, needing to navigate changing consumer preferences and a growing D2C landscape to ensure long-term success.
