One market different numbers
An overview
Without authoritative figures on Indian Retail posted regularly by government ministries or other regulatory agencies, it is at times difficult to skim the right numbers from among the plethora of data being churned out by research firms. Here, we take a look at some of the numbers available.
The Indian retail market is estimated to be the fifth largest in the world and was ranked by AT Kearney's seventh annual Global Retail Development Index (GRDI) in 2008, as the second most attractive emerging market destination for investment in the retail sector (Vietnam was ranked first).
Retail currently contributes around 12 percent of the country’s GDP; by 2015 this figure is expected to jump to 22 percent of GDP and to grow over $630 billion in volume. While organized retail accounts for only a small portion of this retail figure, this is set to change in the immediate future and rise exponentially in the coming years to reach $130 billion by 2015 and to account for a nearly a quarter of all sales in the retail sector. Investment in this sector is also poised to touch around $70 billion by 2010.
On another note, commercial real estate services company CB Richard Ellis' findings state that India's retail market, is currently valued at US$ 511 billion, and is poised to grow to US$ 833 billion by 2013. The report added that organized retail that currently accounts for less than 5 percent of the total retail market is expected to register a compound annual growth rate (CAGR) of 40 per cent and swell to US$ 107 billion by 2013.
And according to the Credit Rating and Information Services of India, the retail industry raked in US$ 25.44 billion turnover in 2007–08, as against US$ 16.99 billion in 2006–07— a whopping growth rate of 49.73 per cent.
The global consultancy AT Kearney in its report on Indian Retail found that consumer spending in India increased by an impressive 75 per cent in the last four years and is set to quadruple in the next 20 years.
Rural Retail
In line with the robust growth of the organized retail in India, there is an associated surge in branded discount outlets in India. Top realtors and local retail chains are developing malls in second and third tier cities, specifically to sell premium branded goods. Led by the rising purchasing power, changing consumption patterns, increased access to information and communication technology and improving infrastructure, rural retail market is estimated to cross US$ 45.32 billion mark by 2010 and US$ 60.43 billion by 2015, according to a study by Confederation of Indian Industry (CII) and YES Bank.The rural retail market in 2008 has grown at 25 per cent compared to the 7–10 per cent growth rate of the urban consumer retail market. With 87 per cent of rural markets not having access to any sort of organized marketing and distribution, this segment has tremendous potential for growth. After ITC's ' Chaupal Sagar' (India's first rural mall), the DCM Shriram Group's Hariyali Bazaar', and Tata Chemicals' Tata Kisan Sansar, retail giants like Reliance, Spencer's and Subhiksha are also expanding in semi-urban and rural areas.
