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Retail Industry Landscape And Trends In India
Introduction
Post liberalization Indian economy
has been traversing boundaries and growing at a pace never seen
before. Right demographics with 81 percent below 45 years age group
along with significantly improved ability to earn and also the propensity
to spend have been the driving force for the growth of the Indian
retail industry along with benevolent macroeconomic conditions.
The Indian consumer has also evolved significantly over the past
decade. The new image of an average Indian consumer today is a rich,
young consumer who aspires to get great the best value for their
hard earned money. This new consumer is at the center of the today’s
organized retail industry. To cater to the needs of this consumer
many sprawling shopping centers, multi-storied malls and huge complexes
that offer shopping, entertainment and food under one roof have
been built in the past five years in the major Indian cities. About
400 new malls, 1,500 supermarkets and 350 departmental stores are
currently being built in various Indian cities. In addition to just
giving value to the Indian consumer and just building supermarkets,
the organized retailers need to be prepared for a quick scale up
across dimensions of people, processes and technology.
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The Indian
Retail Industry Overview
The GRDI position for India
is at number three with China and Kuwait having caught up
with us in the race but still in the last two years India
has witnessed an explosion of organized retail formats in
the otherwise Fragmented Indian retail market. There are nearly
15 million retail outlets, which makes India the highest retail
outlet density in the world. India is the most attractive
market for global retailers to enter. The growth of the retail
trade in India is associated with the growth in the Indian
economy. Gross domestic product (GDP) grew by an annual rate
of 6.6 per cent during 1994-00 but the growth slackened to
4.7 per cent per annum during the next three years the growth
remarkably rose to 8.7 per cent per annum till 2010. The income
of the consumers also has shown a rise since 1999 and this
pattern can be observed and associated in the Retail sales
as well. The local retail sector has grown by 10% on an average
in the past five years.
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There are two key
formats of retail in India the Unorganized or conventional or traditional
retail and organized or modern retail formats. Key
Retail Formats in India The
conventional retail dominated the Indian market for a long time
this format includes retailers consisting of kirana shops, general
stores, chemists, footwear shops, apparel shops, paan and beedi
shops, hand-cart hawkers, pavement vendors, etc. The modern Organized
Retail have come up in many formats in metros and other important
cities. They are usually chain stores, all owned or franchised by
a central entity.
Key Trends The
organized retail sales grew to 20 per cent per annum from Rs. 350
billion in 2003-04 to Rs. 598 billion in 2006-07. Food and grocery
was the main bulk of Indian retailing earlier and its share was
about two thirds in 2003-04 gradually falling to about 60 per cent
in 2006-07. Clothing and footwear, which had the market share of
about 7 % in 2003-04 and it rose to 9 per cent in 2006-07. Furniture,
furnishing, appliances and services, share rose from about 5 per
cent in 2003-04 to 7 per cent in 2006-07. Jewellery, watches, etc.
constituted about 6 per cent of total Indian retailing in 2006-07,
rising from 5 per cent in 2003-04.
Contributing
Author: Vijayalakshmi Ravi, viji.ra@gmail.com
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