The Global Consumer Product And Retail Market was valued at US$ 21.13 Trillion in 2023, according to the Global Consumer Product and Retail Market report, By Sector (Footwear, Apparel, Durables (Sporting Goods and Furniture), Consumer Packaged Goods, Others), By Region (North America, Latin America, Western Europe, Eastern Europe, Asia Pacific, Middle East and Africa), published by Coherent Market Insights.
The consumer product and retail market is estimated to be valued at US$ 21.13 Trillion in 2023 and is expected to exhibit a CAGR of 7.2% over the forecast period (2023-2030)
Market Overview: The consumer product and retail market involves the production, distribution, and sale of consumer goods including food and beverage, clothing, footwear, consumer electronics, and household items. Retailers sell these products directly to consumers through physical stores and e-commerce platforms.
The consumer product and retail market is expected to exhibit significant growth over the coming years owing to increased internet and smartphone penetration leading to rising e-commerce sales and the emergence of omnichannel retailing. The proliferation of digital platforms has enabled consumers to seamlessly browse, purchase, and get products delivered through integrated online and offline retail channels. This has boosted sales across product categories ranging from electronics and appliances to packaged foods and personal care items. The market has become intensely competitive, with retailers vying for consumer wallet share across online and brick-and-mortar outlets.
- Shifting Consumer Preferences and Growing Demand for Personalization: Consumer preferences have been shifting towards more personalized and customized products and shopping experiences. Consumers want products tailored to their specific needs, preferences, and lifestyles. The growth of e-commerce has enabled more personalization through data analytics and digital marketing. Retailers are using technology to get real-time insights into consumer behavior and provide personalized recommendations. The demand for personalization across product design, marketing, and shopping journeys is a key driver.
- Rise of Omnichannel Retailing: Omnichannel retailing that integrates physical stores with online and mobile channels is on the rise. Retailers are adopting omni-channel strategies to provide consumers with a seamless shopping experience across channels. Features like click-and-collect, virtual try-ons, in-store pick-up, and returns for online purchases make shopping more convenient. Omnichannel presence is becoming imperative to meet consumer demand for greater flexibility and integration between online and offline channels. This trend is driving growth across e-commerce and technology adoption in physical retail.
- Intensifying Competition in E-Commerce: The consumer product and retail sectors face intense competition, especially in e-commerce. Established players and new startups are jostling for market share. Competitive pressures have increased, with players offering deep discounts and promotions to acquire and retain consumers. Massive investment is required in logistics, delivery infrastructure, technology, marketing, and customer acquisition. Lack of loyalty makes competition more cut-throat. Surviving and maintaining profitability is challenging amidst the competitive intensity.
- High Operational Costs and Complex Supply Chains: Increasing real estate, labor, inventory, and compliance costs make operations expensive, especially for physical retailers. Complex global supply chains add inventory and logistics costs. Omnichannel capabilities require investment in digital infrastructure and last-mile delivery. Taxes and regulations also contribute to high costs. Maintaining profitability and margins is difficult as expenditures rise. The result is thinner margins and higher prices for consumers. High costs restrain profit growth and investments.
- Emerging regions such as Latin America can provide major business opportunities in the global consumer products and retail market in the near future. Latin America is one of the fastest-growing regions due to the presence of Brazil, Mexico, and Argentina. The region is in close proximity to North America, which enables it to glean investments from leading FMCG (fast moving consumer goods) players operating in North America. Major retail giants from the U.S. have already made investments in the retail industry across Latin America. Furthermore, the region is home to a large number of manufacturing facilities for various consumer goods and services.
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Global Consumer Product and Retail Market - Impact of Coronavirus (Covid-19) Pandemic
- Since the outbreak of the COVID-19 pandemic in December 2019, many industries and markets have faced several challenges. The global consumer products and retail market is one of the major markets that has witnessed a significant negative impact due to the pandemic. Following the pandemic, international trade and travel were restricted, which resulted in massive disruptions in economic activities. Stringent regulations on physical distancing and the adoption of strict lockdown policies impacted consumer products and retail market massively. There was a sharp decline in market growth, due to a temporary disruption in the global supply chain industry. However, the market is gradually recovering and is expected to regain its lost traction as many countries look forward to relax COVID-19 regulations.
- The Asia Pacific region is the fastest-growing market for consumer products and retail. Rapid urbanization, a ballooning middle class, and rising disposable incomes are fueling growth in countries like China, India, Indonesia, Thailand, and Vietnam. Ecommerce is growing exponentially, with local giants like Alibaba (Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology) leading the way. Higher populations contribute to larger aggregate demand. International brands are attracted by the high growth rates and are investing heavily in the region. Local companies are also gaining scale and becoming more competitive. Government policies and regulations are becoming more favorable for foreign investment in areas like retail, e-commerce, and manufacturing. Emerging economies are transitioning towards more open and liberalized markets. All these factors point to massive potential for consumer companies in Asia Pacific going forward. With growing internet and smartphone penetration, consumers are leapfrogging traditional retail models straight to online shopping. Asia Pacific's growing economic clout will make it instrumental in shaping the future of the worldwide consumer and retail landscape.
- The COVID-19 pandemic has accelerated the trend of contactless shopping, which is expected to continue even in the post-pandemic world. This trend is driven by the need for safety and convenience, and it involves several aspects. Firstly, self-checkout systems are becoming increasingly popular in retail stores. These systems allow customers to scan and pay for their items without any human interaction, reducing the risk of virus transmission. Retailers are investing in advanced self-checkout systems that can handle a wide range of products and payment methods. Secondly, contactless payments have seen a significant surge. Consumers prefer to pay using their credit or debit cards, mobile wallets, or other digital payment methods instead of cash.
Major players operating in the global consumer product and retails market include
- Metro AG, Kroger Company, Carrefour SA, Tesco PLC, Wal-Mart Stores, Inc., Costco Wholesale Corporation, Unilever PLC, Amway, Reckitt Benckiser Group plc, Pepsi Co, Inc., Procter & Gamble, L’Oreal Group, Nestle S.A., IBM Corporation, Accenture plc, Atos SE, Hewlett – Packard Company, PTC, Inc., Centric Software, Dassault Systemes S.A., Autodesk, Inc. Gerber Scientific, Inc., SAP SE, and Oracle Corporation
- In June 2020, Walmart, the world's largest retailer, announced a partnership with e-commerce platform Shopify (E-commerce company) to bring more small and medium businesses onto its online marketplace. This helps Walmart expand its product assortment and provide more choices for customers. The move also helps small businesses impacted by the pandemic sell online.
- In May 2021, e-commerce giant Amazon acquired film studio MGM Holdings, giving it an extensive catalog of film and TV shows to bolster its streaming service Prime Video. This is a key strategic move by Amazon to compete with other streaming platforms like Netflix and Disney+(subscription video on-demand over-the-top streaming service).