Retail Industry Structure, Apparel Retailing, Indian Retail Markets, Retail Sector, International Retail Giants, Fibre2fashion

Despite the shooting pain of recession, current economy hasproved favorable to the retail sector of India, making the country to top theRetail Index at a global level. Among 30 emerging countries in the retailindex, India ranks first, followed by China at the fifth position. Investorsgive first priority to this ranking, and global retail strategies are developedon the basis of the growing economies of the countries.

Retail Industry Structure:

Indian retail market is regarded as one among the ten largestmarkets and is estimated to be around $350 billion. Foreign retailers control51% of the market. In this segment the top five retailers comprise less than 2%of the market. During the previous year, India was at the second position. Theshare of the retail business in the countrys GDP is rated to be in-between8-10% in 2007. It has grown in a healthy ratio of 12% currently, and ispositively asserted by economic analysts to go up to 22% by 2010. Retail sectorin India is expected to grow and reach $833 billion USD by 2013 and to $1.3trillion USD by 2013 exhibiting a CAGR (Compound Annual Growth Rate) of 10%.More than four million retail outlets are located all over India, with one million outlets in the urban areas.

Growth Drivers:

A recent research report states that India will be one of the most attractive destinations for retailers from all across the globe. Italso states that organized retailing will grow to retail $50 billion USD by2011. The total number of malls is predicted by the report to grow more than18.9% by 2015. Apparels, food, and grocery will dominate the organized marketsegment in India. (Source: RNCOS, Booming Retail Sector in India).

Changing consumer behavior, and lifestyle, and the influenceof western culture among Indians, have resulted in a phenomenal growth of theretail sector of the country. The majority of population being youngsters withan average age of 25, there is a sharp increase in the consumer-spending trend.The graph of consumer spending grew at an impressive rate of 75% during thepast four years. Low inflation and higher disposable income in the II and IIItier cities have pushed the country up in the global radar.

Apparel Retailing:

Apparel is the second largest in the Indian retail category,and is predicted to grow by 12-15% every year. Along with food and grocery,apparel is expected to dominate in the organized retail category. In a globalperspective, India has the largest number of retail outlets. By 2010, retailmalls are expected to grow two-fold, and by 2015, major retail developmentswill be seen in a drastic pace in all II and III tier cities in the country.

International retail giants are seeking entry into thecountry. Marks & Spencer is planning to open 35 more stores in the periodof five years. Future Group has reorganized its policies regarding FDI planningto bring in more foreign investment. Currently FDI is permitted only in singlebrand retail outlets, and not on multi brand outlets. Mahindra Retail, a partof the Mahindra Group is planning to invest $19.8 million USD by 2010 in itsspecialty retail store Mom and Me. Carrefour, one of the largest retailers ofEurope is proposing to start wholesale operations in India by 2010. Currentlythey export goods from India to UAE, Thailand, Malaysia, and Singapore. Plans are chalked out by the company to start its first cash-and-carry outlet inthe National capital Region.

India is now on the radar of global retailers. Accelerated development of theretail industry in the country and building brand value of domestic products isessential not only for marketing the consumer products more efficiently, butalso for the development of the retail industry.

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