India's e-commerce sector is on fire! With a projected market size of $325 billion by 2030 (IBEF), it's growing at a blistering 18.7% CAGR from 2024 to 2028 (Statista). Meanwhile, traditional brick-and-mortar stores—those kirana shops and bustling markets—are feeling the heat. Foot traffic is dipping, and offline retail is scrambling to keep up. But is this the end of physical stores in India? Not quite. Let's explore how they can survive, drawing parallels with the U.S. market, where e-commerce and offline retail have found a way to coexist.
The Indian E-commerce Juggernaut
The numbers tell a compelling story. India's e-commerce GMV hit $60 billion in FY23, up 22% from the previous year (IBEF). During the 2024 festive season, it clocked $14 billion—a 12% jump from 2023. With 427 million online shoppers expected by 2027 (Statista), fueled by smartphone penetration and initiatives like Digital India, e-commerce is reshaping how we shop. Quick commerce players like Blinkit and Zepto are delivering in 10 minutes, while giants like Amazon and Flipkart dominate festive sales. Online spending, though, is still just 5-6% of total retail—far below the U.S. (15.4%) or China (over 50%).
But this boom has a flip side. Small retailers and kirana stores are losing ground. A 2023 study noted that traditional retail faces a 4% sales drop near e-commerce fulfillment centers (NBER). The convenience of online shopping—price comparisons, vast selection, doorstep delivery—is pulling customers away. So, how can brick-and-mortar fight back?
Lessons from the American Market
The U.S. offers a fascinating case study. E-commerce there grew from 0.63% of retail sales in 1999 to 15.4% in 2024 (U.S. Census Bureau), with online sales hitting $601.75 billion in 2019 alone. During the pandemic, it spiked to 16% of total retail, but here's the kicker: brick-and-mortar still accounts for 84.6% of U.S. retail sales in 2024, totaling $3.02 trillion in the first half (Capital One Shopping). In 2021, physical store sales grew 18.9%—a 21st-century record—outpacing e-commerce's 12.9% rise (Forbes).
Why? American retailers didn't just sit back. They adapted. Take Walmart: it blended its 4,700+ stores with a robust online platform, offering "click-and-collect" (buy online, pick up in-store). In 2020, 17% of Starbucks orders came via its mobile app, ready for pickup (BigCommerce). Physical stores became experience hubs—think Nike's flagship stores with interactive displays or Apple's hands-on product demos. The result? A net 1,820 new brick-and-mortar locations opened in the U.S. in 2023 (Capital One Shopping), proving offline retail isn't dead—it's evolving.
Survival Strategies for Indian Brick-and-Mortar
Indian offline retail can borrow from this playbook and add its own flavor. Here's how:
- Go Omnichannel: Integrate online and offline. Kirana stores could partner with quick commerce platforms—Magicpin's daily orders jumped 100x to 10,000 after joining ONDC (IBEF). Larger retailers can adopt click-and-collect, like U.S. chains, leveraging their physical presence.
- Fact: 73% of U.S. shoppers use both online and offline channels (Harvard Business Review). India's retailers can tap this hybrid trend.
- Unique Experiences: Physical stores offer what e-commerce can't—touch, feel, and immediacy. A local saree shop could host weaving demos or customization sessions. In the U.S., 46% of shoppers prefer in-store for the tactile experience (Raydiant).
- Figure: 94% of Indian consumers returned to physical stores post-COVID (Comarch), showing the appetite for in-person shopping.
- Tech it Up: Use AI chatbots for 24/7 customer service or digital payments to match online convenience. In Tier 2 and 3 cities, where e-commerce is surging, 33% of shoppers use smartphones for purchases (Statista). Offline stores can meet them halfway with tech.
- U.S. Example: 69% of American shoppers research online in-store (RetailMeNot)—Indian stores could offer QR codes linking to product details.
- Community Connection: Kirana stores thrive on trust. Hosting local events or offering personalized service can keep customers loyal. In the U.S., 41% prefer in-store spending for the human touch (Bazaarvoice).
The Road Ahead for Indian E-commerce and Offline Retail
E-commerce in India will keep growing—social commerce alone could hit $80 billion by 2030 (Statista). But offline retail isn't doomed. Globally, in-store sales are expected to reach $21.8 trillion in 2024, up 4.81% (Capital One Shopping). India's retail market, projected at $1.5 trillion by 2030, has room for both. The key? Adaptation. Just as U.S. stores turned physical locations into fulfillment hubs or brand experiences, Indian retailers can blend tradition with innovation.
Imagine a future where your neighborhood kirana store offers online ordering, a handicraft shop doubles as a cultural hub, and malls become experiential destinations. E-commerce might dominate convenience, but brick-and-mortar can own connection. In the U.S., 83.7% of retailers still have physical stores (Capital One Shopping). India's offline retail can follow suit—evolving, not vanishing.
What do you think? Can Indian brick-and-mortar stores reinvent themselves, or will e-commerce take it all? Drop your thoughts below—I'd love to hear your take!
Author: Ankur Trivedi
Business Growth Consultant