Indian Retail Industry

Evolution of Indian retail Industry:

Indian Retail Industry is standing at its point of inflexion, waiting for the boom to take
place. The inception of theretail industry dates back to times where retail stores were
found in the village fairs , Melas or in the weekly markets. These stores were highly
unorganized. The maturity of theretail sector took place with the establishment of retail
stores in the locality for convenience. With the government intervention the retail
industry in India took a new shape. Outlets for Public Distribution System, Cooperative
stores and Khadi stores were set up. These retail Stores demanded low investments for
its establishment.
The retail industry in India gathered a new dimension with the setting up of the
different International Brand Outlets, Hyper or Super markets, shopping malls and
departmental stores.

Key Players in the Indian Retail Sector:

The untapped scope of retailing has attracted superstores like Wal-Mart into India,
leaving behind the kiranas that served us for years. Such companies are basically IT
based. The other important participants in the Indian Retail sector are Bata, Big Bazaar,
Pantaloons, Archies, Cafe Coffee Day, landmark, Khadims, Crossword, to name a few.

Retailing in India: a forecast:

Future of organized retail in India looks bright. According to recent researches it is

projected to grow at a rate of about 37% in 2007 and at a rate of 42% in 2008. It will
capture a share of 10% of the total retailing by the end of 2010.

According to the Union Minister of Commerce & Industry, Shri Kamal Nath, the
organized retail sector is expected to grow to a value of Rs. 2,00,000 crore (US$45
billion) and may generate 10 to15 million jobs in next 5 years. This can happen in two
forms- 2.5 million of these people may be associated directly withretailing and the rest
10 million people may be gainfully employed in related sectors that will be pulled up
through the strong forward and backward linkage effects.
However to compete in this sector one needs to have up-to-date market information for
planing and decision making. The second most important requirement is to
manage costs widely in order to earn at least normal profits in face of stiff competition.
Retail Sector of Indian Economy
The Retail Sector of Indian Economy is going through the phase of tremendous transformation. The retail sector of
Indian economy is categorized into two segments such as organized retail sector and unorganized retail sector with
the latter holding the larger share of the retail market. At present the organized retail sector is catching up very fast.
The impact of the alterations in the format of the retail sector changed the lifestyle of the Indian consumers
drastically. The evident increase in consumerist activity is colossal which has already chipped out a money making
recess for the retail sector of Indian economy.

With the onset of a globalized economy in India, the Indian consumer's psyche has been changed. People have
become aware of the value of money. Nowadays the Indian consumers are well versed with the concepts about
quality of products and services. These demands are the visible impacts of the Retail Sector of Indian Economy.

Since the liberalization policy of 1990, the Indian economy, and its consumers are getting whiff of the latest national &
international products, the with help of print and electronic media. The social changes with the rapid economic growth
due to trained personnels, fast modernization, enhanced availableness of retail space is the positive effects of
liberalization.

The growth factors of the retail sector of Indian economy:

• Increase in per capita income which in turn increases the household consumption
• Demographical changes and improvements in the standard of living
• Change in patterns of consumption and availability of low-cost consumer credit
• Improvements in infrastructure and enhanced availability of retail space
• Entry to various sources of financing

The infrastructure of the retail sector will evolve radically. The emergence of shopping malls are going steady in the
metros and there are further plans of expansion which would lead to 150 new ones coming up by the year 2008. As
the count of super markets is going up much faster than rate of growth in retail sector, it is taking the lions share in
food trade. The non-food sector, segments comprising apparel, accessories, fashion, lifestyle felt the significant
change with the emergence of new stores formats like convenience stores, mini marts, mini supermarkets, large
supermarkets, and hyper marts. Even food retailing has became an important retail business in the national arena,
with large format retail stores, establishing stores all over India. With the entry of packaged foods like MTR, ITC
Ashirbad, fast foods chains like McDonald's, KFC, beverage parlors like Nescafe, Tata Tea, Caf� Coffee and
Barista, the Indian food habits has been altered. This stores have earned the reputation of being 'super saver
locations'.

With the arrival of the Transnational Companies(TNC), the Indian retail sector will confront the following round of
alterations. At present the Foreign Direct Investments(FDI) is not encouraged in the Indian organized retail sector but
once the TNC'S get in they would try to muscle out their Indian counterparts. This would be challenging to the retail
sector in India.

The future trends of the retail sector of Indian economy:

• The retail sector of Indian economy will grow up to 10% of total retailing by the year 2010.
• No one single format can be assumed as there is a huge difference in
• cultures regionally.
• The most encouraging format now would be the hypermarts
• The hypermart format would be further encouraged with the entry of the TNC's