GROWTH AND

CHALLENGES OF INDIAN
RETAIL MARKET

By

DR. L. MANNIVANAN

RETAIL
According to Kotler: Retailing includes all the

activities involved in selling goods or services to

the final consumers for personal, non business
use.
The Indian retail is dotted by traditionally market

place called bazaars or haats comprises of

numerous small and large shops, selling different
or similar merchandise .

ORGANISED AND
UNORGANISED

Organised retailing refers to trading activities

undertaken by licensed retailers, that is, those
who are registered for sales tax, income tax, etc.
These

include

the

corporate-backed

hypermarkets and retail chains, and also the

privately owned large retail businesses.

Unorganised retailing, on the other hand, refers

to the traditional formats of low-cost retailing,
for example, the local kirana shops, owner
manned

general

stores,

paan/beedi

convenience stores, hand cart, etc

shops,

ORGANISED v/s UNORGANISED

COMPONENTS OF RETAIL
SECTOR

SOME OF THE KEY PLAYERS IN

ORGANIZED RETAIL

RETAIL IN INDIA, US & CHINA

GROWTH OF INDIAN RETAIL

MARKET
The contribution of retail industry to Indias GDP
is more than 13%.
Indian retail industry (organized as well as
unorganized) spreads over more than 6 million
outlets (2.4 million urban and 3.6 million in
rural).
The retail industry is expected to grow at a rate
of 12% per annum for the next 5 years.
The Indian retail sector has experienced high
growth rate over the last decade with a visible
shift towards unorganised retailng to organized
retailng formats.

GROWTH OF INDIAN RETAIL MARKET

The retail sector in India has shown a healthy growth and is fast emerging as
one of the largest sectors in the economy.

The organized Indian retail market is slated to grow at a CAGR of 40%,

touching US$ 107 billion by 2013.

The Industry has been growing at a compound annual rate of 6.4% since
1998.

GROWTH OF INDIAN RETAIL

MARKET
A number of large corporate houses Tatas, Rahejas,
Piramalss, Goenkas have already made their foray into this
arena, withbeautyandhealthstores, supermarkets, selfservicemusicstores, newagebookstores, every-day-lowprice stores, computers and peripherals stores, office
equipment stores and home/building construction stores.
Today the organized players have attacked every retail
category.

MALLS IN INDIA
The total concept and idea of shopping
has undergone change. Modern retailing
has entered into the Retail market in
India as is observed in the form of
bustling shopping centers, multi-storied
malls and the huge complexes that offer
shopping, entertainment and food all
under one roof.

GROWTH OF INDIAN RETAIL

MARKET
The BMI India Retail Report for 2010 says that the total retail sector is approximately US$
353 billion.
India's retail sector is estimated to touch US$ 833 billion by 2013 and US$ 1.3 trillion by
2018.
Traditonal retail is probable to grow at 5% and reach a size of US$ 650 bilion while organized
retail is probable to grow at 25% and reach a size of US$ 20 bilion by 2020.
India's retail market is expected to grow at 7% over the next 10 years, reaching a size of US$
850 bilion by 2020.

Key Drivers Of The Indian

Retail Industry

Emergence of nuclear families

An increase in the double-income households trend
Large working population
Reasonable Real estate prices
Increase in disposable income and customer aspiration
Demand as well as increase in expenditure for luxury items
Growing preference for branded products and higher aspirations
Growing liberalization of the FDI policy in the past decade
Increasing urbanisation,
Rising affluence amid consumers

ENTRY OF MNCs

The world's largest retailer by sales, Wal-Mart Stores Inc and

Sunil Mittal's Bharti Enterprises have entered into a joint
venture agreement and they are planning to open 10 to 15
cash-and-carry facilities over seven years.

Carrefour, the worlds second largest retailer by sales, is

planning to set up business entities in the country.

The worlds fifth largest retailer by sales, Costco Wholesale

Corp (Costco) known for its warehouse club model is also
interested in coming to India and waiting for the right
opportunity.

Tesco Plc., plans to set up shop in India with a wholesale

cash-and-carry business and will help Indian conglomerate
Tata group to grow its hypermarket business.

BOTTLENECKS

A long way to meet international standards

Lack of efficient supply-chain management
Lack of required retail space
No fixed consumption pattern
Shortage of trained manpower
Lack of proper infrastructure and distribution channel
Different structure of sales tax in different states. Taxation
laws that does not favor small retailers.

CONCLUSION

The future of the India Retail Industry shows potential with the growing of
the market, government policies becoming more favorable and the emerging
technologies make facilitating to retailing.

Young Indians are purchases mobile phones, fashion, accessories, food and
beverages, quick service restaurants, etc. who makes the contribution in
growth of retail sector.

The retail sector is grooming with rapidly and also shifting from
unorganised sector to organised sector retailing.

Online retail business is another format which has high potential for growth
in the near future.

Those who want to enter in the Indian retail market now can learn about
local dynamics, develop market insights and establish leadership positions.

Thank You!