Retail Sector Income to Grow More Than 30% in 2009-10

Indian retail market, ranked as the mostattractive emerging market for investment in the retail sector and the fifthlargest retail destination globally, is likely to regain strength with incomeof major retail players expected to grow consistently to average more than 30 per cent by theend of current fiscal, according to an Assocham Financial Pulse Study.


The Assocham Financial Pulse (AFP) Study titled"Prospects in Indian Retail Sector" estimated that in the secondquarter of FY 2009-10, income of the retail sector grew up by 7.2 per cent overthe corresponding period of last year whereas according to last five yearsperformance of the retail sector, the retail sector income would grow up by22.7 per cent and 30.25 per cent in the third and fourth quarter of thefinancial year 2009-10. The Study noted that the share of retail trade in thecountry's gross domestic product (GDP) was between 8 to 10 per cent earlier.With strides of development in the organized retail segment, its share hasrisen to 12 per cent presently.


As per the Study findings, the overall size ofIndian retail sector has been estimated to grow by USD 55 billion in 2010, at acompound annual growth rate (CAGR) of 5.5 per cent, to become USD 410 billionmarket by 2010. Also, organized retail, which currently accounts for nearly 5per cent of the retail market, is pegged at around USD 9.23 billion andexpected to grow at a CAGR of 2.3 per cent to touch USD 13 billion by 2010.


"India has one of the largest numbers ofretail outlets in the world. The sector is witnessing exponential growth withretail developments taking place not only in major cities and metros but evenin tier-II and tier-III cities in India" said Dr. Swati Piramal, Presidentof Assocham. According to Assocham estimates, over 100 malls of over 30 millionsquare feet of new shopping centre space are projected to open in India between2009 and end-2010.


As the competition gets tougher with newcompanies entering the Indian retail landscape, existing players have also lookedinto their expansion activities seriously with plans of opening up new stores.In the next phase of retail revolution in India, the companies are going to woothe rural segment as the hinterland has witnessed an upsurge in economicdevelopment over the past few years hence maximum growth is expected to comefrom rural markets. During the last decade, the per capita income has grown upby 50 per cent in rural India, mainly on account of rise in agri-commodityprices and improved productivity, concluded the Assocham Study.


Originally published in The Stitch Times: March 2010