Brick-mortar stores remain relevant in tier 2, 3 cities despite aggressive quick commerce penetration: PwC report

New Delhi [India], March 9 (ANI): Despite the aggressive expansion of quick commerce businesses in India, given that people are increasingly opting to shop through the emerging online platforms, brick-and-mortar retail remains a robust channel in the tier 2 and tier 2 cities, as per a report by global consulting firm PwC.

The PwC report argued that independent retailers’ strong sense of service and engagement with their loyal consumer base supported this robustness in physical stores.

While several striking findings emerged in the survey, one that caught PwC’s attention was the continued success of brick-and-mortar retail in tier 2 and 3 cities.

The retail market in India is expected to grow to USD 1,892 billion by 2029-30, at a compound annual growth rate (CAGR) of 10.3 per cent, with e-commerce, the fastest growing channel, notching a CAGR of 22.5 per cent and touching USD 220 billion by 2029-30, as per the report by global consulting firm PwC.

To understand the current dynamics of the retail sector in India, PwC India conducted a survey between December 2024 and January 2025 to assess how traditional retailers perceive e-commerce/online shopping platforms and understand the shift in consumer behaviour from offline6 to online shopping.

The survey – conducted across metro cities and Tier 1 cities such as Mumbai, Bengaluru, Jaipur, Bhubaneswar, and Bhopal and Tier 2 and Tier 3 cities like Asansol, Amritsar, Gwalior and Karimnagar – included online interviews with several operational and sales heads of retailers and face-to-face interviews with 1,026 traditional retailers.

The PwC survey found that nearly 50 percent of Indian consumers prefer a hybrid model, including both online and offline options, when making purchases.

This approach from a large section of consumers is keeping the competition between the offline and online retail channels alive.

Physical stores still appeal to many people. 34 percent of the people surveyed said they would prefer only offline shopping, compared to 21 percent who said they would prefer only online shopping.

“The primary reasons for shopping offline include the ability to see and try products before buying, the trust in the store/brand, and the in-store shopping experience,” a paper produced by PwC titled ‘The retail reinvention paradigm: How brands could up their game’ noted.

The paper said this is further corroborated by the fact that some retailers are beginning to personalise the offline experience for each customer, tapping into the hitherto untapped power of unique in-store experiences.

For personal products, the survey found that online shopping is the preferred choice for more than 50 per cent of consumers, especially in categories such as apparel, beauty and personal care, fashion and accessories, and sports and fitness.

On the other hand, family-related products, such as fresh produce, home furnishings, white goods and home care products, are still more commonly made in-store as these purchases often require more tactile and sensory engagement.

While the shift to online shopping for personal items is indeed sharp and undeniable in metro cities and Tier 1 cities, the overall trend is more nuanced.

“It is not an across-the-board transition but a segmented shift which differs between consumer categories and geographical areas,” PwC paper read.

Brands now have a greater number of channels to sell their products across different categories to consumers. (ANI)