Filing Information: January 2007, IDC #, Volume: 1

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India Retail Sector IT Usage and

Trends 2007-2011 Forecast and
Analysis - An Overview

Arpan Gupta Parishesh Mishra

Parijat Chakraborty

Filing Information: January 2007, IDC #, Volume: 1

Vertical Markets Watch: Market Analysis
MARKET ANALYSIS

India Retail Sector IT Usage and Trends 2007-2011

Forecast and Analysis - An Overview
Arpan Gupta Parishesh Mishra
Parijat Chakraborty

IDC OPINION

# ©2007 IDC
TABLE OF CONTENTS

In This Study 1
Introduction........................................................................................................................................ 1
Methodology ............................................................................................................................................. 1
Executive Summary.................................................................................................................................. 3

S i t u a t i o n O ve r vi e w 6
Retail Sector ...................................................................................................................................... 6
Overview of the sector ....................................................................................................................... 6
Evolution of Indian Retail ................................................................................................................... 9
Government Initiatives in the Sector .................................................................................................. 12
Structure of the Sector....................................................................................................................... 14
Retail Sector Classification in India.................................................................................................... 16
Organized Vs Unorganized Retail...................................................................................................... 26
Players in the Sector.......................................................................................................................... 28
Consumption Patterns in the Sector .................................................................................................. 33
Importance of Retail and Wholesale in India ..................................................................................... 34
Trends in the Sector .......................................................................................................................... 35
Retail as an Investment Option.......................................................................................................... 42
Factors Favoring the Growth of the Retail Sector in India ................................................................. 43
Challenges in the Sector.................................................................................................................... 46
Role of Information Technology in the Sector.................................................................................... 52

Future Outlook 61
Forecast and Assumptions ....................................................................................................................... 61
Key Forecast Assumptions ................................................................................................................ 61
Overall IT Market in Retail ................................................................................................................. 64
Overall Hardware Market in Retail ..................................................................................................... 65
Overall Servers Market in Retail ........................................................................................................ 67
Overall Client Market in Retail ........................................................................................................... 68
Overall Storage Market in Retail........................................................................................................ 69
Overall Peripherals Market in Retail .................................................................................................. 70
Overall Networking Equipment Market in Retail................................................................................. 71
Overall Software Market in Retail ...................................................................................................... 72
Overall Services Market in Retail....................................................................................................... 73
Overall Others Market in Retail.......................................................................................................... 75
Market Context ......................................................................................................................................... 76
Change in Scope of Verticals Definition in 2006 ................................................................................ 76
Change in Scope of Products Definition in 2006................................................................................ 76

Essential Guidance 79

Learn More 81
Definitions.......................................................................................................................................... 81
Vertical Definitions ............................................................................................................................. 81
Product Definitions ............................................................................................................................ 81
Related Research ..................................................................................................................................... 87

©2007 IDC #
LIST OF TABLES

P
1 Total IT Spend in Retail Vertical (US$ Millions), 2006-2011......................................................... 4
2 Key Players in Food and Grocery Segment in Indian retail sector ............................................... 19
3 Advantages of Organized and Unorganized Retailing.................................................................. 28
4 Players Across Various Segments and Various Formats in Indian Retailing, 2006...................... 30
5 Turnover of Players in Indian Organized Retailing, 2005-06 ....................................................... 31
6 International Players Likely to Enter the Indian Retail Market in Near Future............................... 32
7 Retailers in India or Eyeing to be in India – The Prefered Entry Route ........................................ 33
8 Recent Mergers and Acquisitions in Indian Retailing ................................................................... 37
9 Formats Adopted by Key Players in Indian Retail Sector ............................................................. 38
10 Investment Plans of Few Major Players for Retail Sector............................................................. 42
11 Value Proposition of Modern Retail Formats................................................................................ 45
12 Key Forecast Assumptions for the Indian Retail Sector, 2006-2011 ............................................ 61
13 Overall IT Spend in Retail (US$ million) 2006-2011 ..................................................................... 64
14 Overall IT Spend in Retail (Percentage) 2006-2011..................................................................... 64
15 Overall Hardware Spend in Retail (US$ million) 2006-2011......................................................... 65
16 Overall Hardware Spend in Retail (Percentage) 2006-2011......................................................... 65
17 Overall Servers Spend in Retail (US$ million), 2006-2011 ........................................................... 67
18 Overall Servers Spend in Retail (Percentage), 2006-2011........................................................... 67
19 Overall Clients Spend in Retail (US$ million) 2006-2011 ............................................................. 68
20 Overall Clients Spend in Retail (Percentage) 2006-2011 ............................................................. 68
21 Overall Storage Spend in Retail (US$ million), 2006-2011........................................................... 69
22 Overall Storage Spend in Retail (Percentage) 2006-2011............................................................ 69
23 Overall Peripherals Spend in Retail (US$ million), 2006-2011 ..................................................... 70
24 Overall Peripherals Spend in Retail (Percentage) 2006-2011 ...................................................... 70
25 Overall Networking Spend in Retail (US$ million), 2006-2011 ..................................................... 71
26 Overall Networking Spend in Retail (Percentage) 2006-2011 ...................................................... 71
27 Overall Software Spend in Retail (US$ million), 2006-2011 ......................................................... 72
28 Overall Software Spend in Retail (Percentage) 2006-2011 .......................................................... 72
29 Overall Services Spend in Retail (US$ million), 2006-2011.......................................................... 73
30 Overall Services Spend in Retail (Percentage) 2006-2011 .......................................................... 73
31 Overall Others Spend in Retail (US$ million), 2006-2011 ............................................................ 75
32 Overall Others Spend in Retail (Percentage) 2006-2011 ............................................................. 75
33 India, Comparison of the Scope of the Vertical – 2005 Vs 2006 .................................................. 76
34 India, Comparison of the Scope of the Product Categories – 2005 Vs 2006................................ 76

# ©2007 IDC
LIST OF FIGURES

P
1 Share of Organized and Unorganized Retailing in India in 2005-06 ............................................. 7
2 Retailing in Indian Cities, 2006 ..................................................................................................... 8
3 Retailing in Indian Cities, 2011 ..................................................................................................... 8
4 Development of Retail Sector in India .......................................................................................... 9
5 Evolution of Retailing in India ....................................................................................................... 10
6 Overview of FDI Benefits and Apprehensions in Indian Retailing................................................. 13
7 Value Chain of Indian Retail Industry ........................................................................................... 16
8 Segments and Formats of Organized Retail Sector in India......................................................... 18
10 Fastest Growing Segments in Indian retailing in percentage for the Next 3 Years ....................... 23
11 Distribution of Retail Formats in India and US, 2006.................................................................... 25
12 Fastest Growing Formats in Indian retailing in percentage, 2006................................................. 25
13 Organized Retail Penetration in Various Countries, 2006 ............................................................ 26
14 Organized Retail Penetration in Various Categories, 2006 .......................................................... 27
15 Players in Indian Retail Sector, 2006 ........................................................................................... 29
16 Share of Players in Indian Organized Retailing, 2005-06 ............................................................. 32
17 Overview of Major Trends in Indian Retailing ............................................................................... 41
18 Share of Urban and Rural Markets in Various Segments in Indian Retailing, 2006...................... 45
19 Overview of Factors Favoring Growth of the Retail Sector in India .............................................. 46
20 Mall Space Distribution in India, 2005 and 2007 .......................................................................... 49
21 Overview of Major Challenges in Indian Retailing ........................................................................ 52
22 Level of IT Usage Among Indian Retailers, 2006 ......................................................................... 55

©2007 IDC #
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