The retail industry is seeing an immune revamp exercise in India. With an array of domestic and global players to enter this segment, the sector is poised for significant growth. The article deals with the present retail scenario and key players in India.
From the pint-sized neighborhood kirana store to the sprawling city mall,
the current size of the retail sector in India is around Rs. 16,00,000 cr ($350
bn), growing at 13% per annum. The GDP of the country as a whole is estimated
to be about Rs. 34,50,000 cr ($750 bn) growing at 8% per annum.
Foreign Direct Investment (FDI) or no FDI, Wal-Mart sourced goods worth US$1.2
bn in 2004, more than US$1.5 bn in 2005 and is expecting a 30% increase in sourcing
this year. It has a presence in Bangalore and is now in the process of setting
up offices in New Delhi and Mumbai.
India's
retail industry is fast evolving, which is a clear reflection of consumption (and
hence the economy) on a rapid upswing. The fact that foreign players are licking
their lips to get into India and domestic majors don't want to be left behind
is a testament to the fact that Indian retail is today at crossroads.
Despite
all these crucial developments, as matters stand today, only Rs. 35,000 cr (US$7.61
bn) of the entire industry is organized. Hence, organized retailing is a measly
2-2.5% of India's retail sector. The top five players account for less than 1%
of the market. A mammoth 12 million-15 million retail outlets constitute rest
of the 98% of unorganized sector. For an emerging market economy like India, which
is growing at 8% per annum, this is an extremely unviable industry model in the
long run. |
