The
fast-growing retail sector is providing around 8% employment
and accounting for over 10% of the country's GDP. Though the
sector is one of the world's largest, it is highly fragmented,
and organized retail is still in nascent stage. However, it
is fast moving towards growth and maturity. A decade ago,
not a single mall was there, but today there are more than
500 malls operating across the country. A quiet revolution
is brewing in the Indian retail space tempted by the spending
spree of the Indian public and many domestic business conglomerates
are joining the retail bandwagon.
With the improving infrastructure,
the conducive environment for foreign brands, and 100% FDI
in `cash and carry' through the automatic route, the organized
retail is set to become the next big thing in India. India
is a very promising land for retailers going by the current
growth trends. According to McKinsey Consultancy, by 2025,
the Indian retailing will be the world's fifth biggest consumer
market. However, currently, 97% of the sector is unorganized
in the form of 15 million family-run kirana stores,
the most common format of retailing.
For big domestic retailers
this means a huge opportunity (less for the foreign ones)
allowing that only 51% of shops are selling single-brand products
on a wholesale basis. Reliance, Aditya Birla Group, ITC, Landmark,
RPG and Bharti Enterprises have all indicated, through their
entry, their intentions to succeed in what is seen as the
next big business in India. They are also bring capital as
well as business confidence into the sector. Reliance's foray
into the organized retail sector has changed the scenario
of retailing completely. Other players, such as Pantaloons
and Shoppers' Stop, too have aggressive expansion plans on
the cards. |
