Indian retail market is the fifth largest retail destination globally. It is estimated to grow from $427 billion in 2010 to $637 billion in 2015. The share of retail trade in the country’s gross domestic product (GDP) is 12 percent and is expected to grow by 22 percent by 2010. Organized retail sector has been growing at a faster pace than traditional outlets. Its growth is expected to grow from 5 percent to 14 to 18 percent in 2015. Higher disposable incomes, alterations in people’s lifestyle, easy availability of credit cards, high exposure of brands through media, increasing number of malls and branded outlets has enabled this transition of sales from traditional outlets to organized retail. The Indian government in 2005 allowed foreign direct investment (FDI) in single brand retail to 51 percent. This has opened up a lot of opportunities in Indian organized retail sector. Clothing and apparel contributes to about 36 percent of the total organized retail sales. Apparel is the fastest growing category with both domestic and international brands. Footwear has the highest retail penetration in organized retail with wide distribution network and consumer confidence.
Though organized retail sector is restricted to urban and semi-urban regions, companies are looking at rural markets for expansion. Rural retail market is estimated to cross $ 45.32 billion mark by 2010 and $ 60.43 billion by 2015. ITC launched the country’s first rural mall ‘Chaupal Sagar’, offering a diverse product range such as FMCG, electronic appliances, automobiles in an attempt to provide farmers a one-stop destination for all their needs. Companies such as Rallis, Tata Chemicals, DCM Shriram Consolidated Ltd. (DSCL) and Mahindra & Mahindra expanded to rural markets to tap this big business opportunity (MANAGE, 2005). DSCL has started utility shopping centers called “Haryali Kissan Bazaars”, Godrej Agrovet as “Godrej Aadhar” and Tata Chemicals as “Tata Kisan Sansar” which seek to cater to all needs of farmers, under one roof. Due to huge untapped rural market and increasing purchasing power of rural population we can expect more organized retail outlets to enter rural market.
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Hi Folks,
I guess there is an issue with your statistics – Indian GDP measured at constant prices is USD 750 – 800 for March 2009. And Retail is anywhere between USD 325 – 350. By that logic Retail is easily upwards of 40% of GDP currently.
Hence your statement below needs a re-look…
“The share of retail trade in the country’s gross domestic product (GDP) is 12 percent and is expected to grow by 22 percent by 2010.”
Cheers,
Sid