India Emerging In Forefronts Due to Its Retail Explosion
Retailing is the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. A retailer is one who stocks the producer’s goods and is involved in the act of selling it to the individual consumer, at a margin of profit. As such, retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. Retail Sector is the most booming sector in the Indian economy. India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organised retail, meaning that the opportunity in India remains immense. Retail should continue to grow rapidly—up to US$ 535 billion in 2013.
[/i][/b]It must be noted that even within the organised sector, the number of individually-owned retail outlets far outnumber the corporate backed institutions. Though these numbers translate to approximately 8% of the workforce in the country (half the normal share in developed countries) there are far more retailers in India than other countries in absolute numbers, because of the demographic profile and the preponderance of youth, India’s workforce is proportionately much larger. That about 4% of India’s population is in the retail trade says a lot about how vital this business is to the socio-economic equilibrium in India.
The sector contributes 10% of the GDP, and is estimated to show 20% annual growth rate by the end of the decade. The current growth rate is estimated to be 8.5%, but CRISIL report says that the retail market is most fragmented in the world and only 2% of the entire retailing business is in the organized sector. There are about 300 new malls, 1500 supermarkets and 325 departmental stores being built in the cities very soon.[/i][/b][/i][/b]
The retail boom will face a strong competition from the 12 million mom-and-pop stores, which are easily accessible and approachable and provide services like free home delivery and goods at credit. [/i][/b][/i][/b]
India's retail sector, which accounts for about 9-10% of the country's GDP, remains one of the least developed sectors in India. The estimated annual retail sales accounts for about $ 6 billion and is expected to reach $ 17 billion dollar mark by the year 2010, according to a study done by the Associated Chambers of Commerce & Industry (ASSOCHAM). According to some analysts, by the year 2010, the retail sector in India has the potential to reach $ 270-280 billon dollar mark[/i][/b][/i][/b]
The growth factors of the retail sector of Indian economy:[/b][/b]
Increase in per capita income which in turn increases the household consumption
Demographical changes and improvements in the standard of living
Change in patterns of consumption and availability of low-cost consumer credit
Improvements in infrastructure and enhanced availability of retail space
Entry to various sources of financing
The future trends of the retail sector of Indian economy:[/b][/b]
The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.
No one single format can be assumed as there is a huge difference in cultures regionally.
The most encouraging format now would be the hypermarts
The hypermart format would be further encouraged with the entry of the TNC's
The BMI India Retail Report for the first-quarter of 2011 forecasts that total retail sales will grow from US$ 392.63 billion in 2011 to US$ 674.37 billion by 2014. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities.[/i][/b][/i][/b]
Organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach US$ 450 billion by 2015.
Furthermore, according to a report titled 'India Organised Retail Market 2010', published by Knight Frank India in May 2010 during 2010-12, around 55 million square feet (sq ft) of retail space will be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft.
A simple glance at the employment numbers is enough to paint a good picture of the relative sizes of these two forms of trade in India – organized trade employs roughly 5 lakh people (see Tables 8 & 9), whereas the unorganized retail trade employs nearly 3.95 crores5! According to a GoI study the number of workers in retail trade in 1998 was almost 175 lakhs. Given the recent numbers indicated by other studies, this is only indicative of the magnitude of expansion the retail trade is experiencing, both due to economic expansion as well as the ‘jobless growth’ that we have seen in the past decade.
Retailing is the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. A retailer is one who stocks the producer’s goods and is involved in the act of selling it to the individual consumer, at a margin of profit. As such, retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. Retail Sector is the most booming sector in the Indian economy. India's retail market is expected to be worth about US$ 410 billion, with 5 per cent of sales through organised retail, meaning that the opportunity in India remains immense. Retail should continue to grow rapidly—up to US$ 535 billion in 2013.
[/i][/b]It must be noted that even within the organised sector, the number of individually-owned retail outlets far outnumber the corporate backed institutions. Though these numbers translate to approximately 8% of the workforce in the country (half the normal share in developed countries) there are far more retailers in India than other countries in absolute numbers, because of the demographic profile and the preponderance of youth, India’s workforce is proportionately much larger. That about 4% of India’s population is in the retail trade says a lot about how vital this business is to the socio-economic equilibrium in India.
The sector contributes 10% of the GDP, and is estimated to show 20% annual growth rate by the end of the decade. The current growth rate is estimated to be 8.5%, but CRISIL report says that the retail market is most fragmented in the world and only 2% of the entire retailing business is in the organized sector. There are about 300 new malls, 1500 supermarkets and 325 departmental stores being built in the cities very soon.[/i][/b][/i][/b]
The retail boom will face a strong competition from the 12 million mom-and-pop stores, which are easily accessible and approachable and provide services like free home delivery and goods at credit. [/i][/b][/i][/b]
India's retail sector, which accounts for about 9-10% of the country's GDP, remains one of the least developed sectors in India. The estimated annual retail sales accounts for about $ 6 billion and is expected to reach $ 17 billion dollar mark by the year 2010, according to a study done by the Associated Chambers of Commerce & Industry (ASSOCHAM). According to some analysts, by the year 2010, the retail sector in India has the potential to reach $ 270-280 billon dollar mark[/i][/b][/i][/b]
The growth factors of the retail sector of Indian economy:[/b][/b]
Increase in per capita income which in turn increases the household consumption
Demographical changes and improvements in the standard of living
Change in patterns of consumption and availability of low-cost consumer credit
Improvements in infrastructure and enhanced availability of retail space
Entry to various sources of financing
The future trends of the retail sector of Indian economy:[/b][/b]
The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.
No one single format can be assumed as there is a huge difference in cultures regionally.
The most encouraging format now would be the hypermarts
The hypermart format would be further encouraged with the entry of the TNC's
The BMI India Retail Report for the first-quarter of 2011 forecasts that total retail sales will grow from US$ 392.63 billion in 2011 to US$ 674.37 billion by 2014. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities.[/i][/b][/i][/b]
Organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 14 - 18 per cent of the total retail market and reach US$ 450 billion by 2015.
Furthermore, according to a report titled 'India Organised Retail Market 2010', published by Knight Frank India in May 2010 during 2010-12, around 55 million square feet (sq ft) of retail space will be ready in Mumbai, national capital region (NCR), Bengaluru, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft.
A simple glance at the employment numbers is enough to paint a good picture of the relative sizes of these two forms of trade in India – organized trade employs roughly 5 lakh people (see Tables 8 & 9), whereas the unorganized retail trade employs nearly 3.95 crores5! According to a GoI study the number of workers in retail trade in 1998 was almost 175 lakhs. Given the recent numbers indicated by other studies, this is only indicative of the magnitude of expansion the retail trade is experiencing, both due to economic expansion as well as the ‘jobless growth’ that we have seen in the past decade.