Organised retail is poised to reach $ 1.3 trillion
by 2020 and provides a tremendous growth opportunity for retailers
The story of India’s growth and consumption
potential remains intact, over the last decade with rising incomes coupled with
proliferation of consumer products, and increased urbanization. According to
the Global Retail Development Index 2012, India ranks fifth among the top 30
emerging markets for retail. The recent years have witnessed rapid
transformation in customer behavior and vigorous profits across various
categories. This can be attributed to the overwhelming acceptance of Indian
consumers to modern retail formats. Organized retail, which constitutes 8 per
cent of the total retail market, is expected to grow much faster than
traditional retail. It is poised to reach $ 1.3 trillion by 2020 and provides a
tremendous growth opportunity for retailers.
Foreign Investment:
The country is fast becoming an exciting and
dynamic retail destination for foreign investment. The advent of FDI will open
up strategic investment opportunities for global retailers, who have been
waiting to invest in India. It will give the necessary fillip to the growth of
the economy.
Challenges faced by the industry:
Though modern retail offers immense opportunity to
retailers, the market poses its own challenges. The sector is facing immense
competition with mom-and-pop (kirana) stores, which cater to customers
within their neighborhood. Customers find shopping more comfortable at a local
store for their day-to-day needs. This can be addressed by positioning modern
retailers in a manner which differentiates them from a local vendor. Other
challenge exists is sky rocking retail real estate costs due to which it is
becoming difficult to achieve break-even. More and more retailers are now
willing to go multi-channel way. Digital commerce provides brick retailers to
expand their reach without investing in expensive real estate. Besides,
retailers have to offer the consumers more width and depth.
The Indian modern retail is lacking behind the pace
consumerism is developing in India. As an industry level, retail needs to be
more consolidated and at the same time a lot of Government policies are
required to create a level playing field.
