Domestic consumption market in India is estimated to grow approximately 7 to 8% with retail accounting for 60% of the overall segment. Of this 60%, organized retail is just 5% which is comparatively lesser than other countries with emerging economies. In developed countries organized retailing is the established way of selling consumer products. Despite the low percentage, Indian textile industry has grown noticeably in organized retailing of textile products. The negative phase in exports may have compelled the Indian textile retailers to explore the opportunities in the domestic market substantially causing the outstanding growth in the concerned segment. These indications give a positive notion that organized retailing has arrived in the Indian market and is here to stay. It is expected to grow 25-30 per cent annually and would triple in size from Rs35,000 crore in 2004-05 to Rs109,000 crore ($24 billion) by 2010.
India is on the radar screen in the retail world and global retailers and at their wings seeking entry into the Indian retail market. The market is growing at a steady rate of 11-12 percent and accounts for around 10 percent of the country’s GDP. The inherent attractiveness of this segment lures retail giants and investments are likely to sky rocket with an estimate of Rs 20-25 billion in the next 2-3 years, and over Rs 200 billion by end of 2010. Indian retail market is considered to be the second largest in the world in terms of growth potential.
Contributed by: Abhishek Devpura
2 comments:
I believe a very imp factor behind this transformation is the increased disposable income in the hands of the Indian middle income group...this has increased their buying power and demand for choice...subsequently a need for organizing the retail sector has come up.
2007 was a pioneering year for the Indian retail Industry. Many Indian corporates joined the retail bandwagon in the year. Among them were the Bharti’s of Airtel who tied up with the retailing giant Wal-Mart, the Aditya Birla Group with many more in the queue who are willing to invest substantially to grab a piece of the huge retail pie.
The veterans like the Future Group have consolidated their position by opening more stores and entering new verticals like home solutions as well as consumer durables.
Reliance Retail, which faced some resistance from a few states, has put behind the same and is aggressively adding stores across the country and entering newer verticals like branded apparels.
Subhiksha is also expanding and spreading in to the smaller towns. The Tatas also expanded by getting in to newer verticals of Consumer durables under the name of ‘Corus’.
Again there are others like Vishal, Spencer’s and a host of others who have consolidated their position in the retail industry.
There have been some notable exits too. The pioneers of the organized retail industry ‘Piramals’ sold off their stake in Pyramid to India Bulls.
What will be interesting to watch is how the veterans of the retail industry stand up to the likes of Wal-Mart, Tesco and Carrefour who are planning their entry into the Indian Market. Can a consolidation within the retail industry also be expected?
What can be safely said is that the Indian consumer has got hooked to the ambience and delight of shopping in the modern retail format with promotional offers being run round the year, which has kept the cash registers full for the retail stores.
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