INDIAN RETAIL INDUSTRY

History
The origins for retail business in India can be traced with the emergence of Kirana
stores and mom-and-pop stores. These stores used to cater to the local people.
Gradually the government started supporting the rural retail and many indigenous
franchise stores came up with the help of Khadi & Village Industries Commission.
The economy began to
open up in the 1980's resulting in the change of retailing. The first few companies to
come up with retail chains were in textile sector, for example, Bombay Dyeing, S
Kumar's, Raymonds, etc. Later Titan launched retail showrooms in the organized
retail sector. With the passage of time new entrants moved on from manufacturing
to pure retailing.

Today India is the fifth largest in the world in terms of Retail Industry. Comprising
of organized and unorganized sectors, Indian retail industry is one of the fastest
growing industries, especially over the last few years. Though initially, the retail
industry in India was mostly unorganized, with the change of tastes and preferences
of the consumers, the industry is getting more popular these days and getting
organized as well. With growing market demand, the industry is expected to grow
at a pace of 25-30% annually. The India retail industry is expected to grow from
Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore shortly.

Indian Retail Industry is the most promising emerging market for investment
According
to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, the
retail trade in India had a share of 8- 10% in the GDP (Gross Domestic Product) of
the country in the year 2007. In 2009, it rose to 12% in the year 2008 and expected
to reach 22% in the next few years.

The Indian Retail Industry is expected to grow to US$ 700 billion in the year 2010
according to a report by Northbride Capital. In the same year the organized sector
will be 20% of the total market share as compared to the share of organized sector
in 2007 was 7.5% of the total retail market.

Retail is India's largest industry and for over 10% of the India's GDP and around
8% of the employment. Retail sector is one of India's fastest growing sectors with a
5% compounded annual growth rate. As India has a huge middle class base and its
untapped retail industry are key attractions for global retail giants planning to enter
newer markets. Due to the changing lifestyles, strong income growth in the middle
class population and favorable demographic patterns, Indian retail is expected to
grow 25% annually and expected that retail business in India could be worth US$
175-200 billion by 2016.

Brief introduction
The Indian Retail Industry has come forth as one of the most dynamic and fast
paced industries with several players entering the market. Today due to Retail
business the total concept and idea of shopping has undergone an attention
drawing change in terms of format and consumer buying behavior, ushering in a
revolution in shopping in the country.

Modern retailing has entered into the country and 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. A large young working population with
median age of 24 years, nuclear families in urban areas, along with increasing
working women population and emerging opportunities in the services sector are
the key factors in the growth of the organized Retail sector in India.

The growth pattern in organized retailing and in the consumption made by the
Indian population will follow a rising graph helping the newer businessmen to
enter the India Retail Industry.

The Food Retail Industry in India dominates the shopping basket. The Mobile
phone Retail Industry in India is already a US$ 16.7 billion business, growing at
over 20 %per year. The future of the India Retail Industry looks promising with the
growing of the market, with the government policies becoming more favorable and
the emerging technologies facilitating operations.
Market capitalization

The present value of the Indian retail market is estimated to be around Rs.
12,00,000 crore($270 billion) and the annual growth rate is 5.7%. Retail market for
food and grocery with a worth of Rs. 7, 43,900 crore is the largest of the different
types of retail industries present in India. Furthermore around 15 million retail
outlets help India win the crown of having the highest retail outlet density in the
world.

Size of the industry

In the next fe years the organised Retail Sector in India is expected to triple its size.
The food and grocery retail sector is expected to multiply five times in the same
time frame. The market size of Indian retail industry is about US $312 billion. The
organised retailing comprises only 2.8% of the total retailing market and is
estimated at around US$ 8.7 billion and the organised retail sector is expected to
grow to US $ 70 billion.

In the present scenario, 51% Foreign Direct Investment is permitted in India only
through single brand retailing and FDI upto 100% allowed under the automatic
route for cash and carry wholesale.

Total contribution to the economy/ sales

In 2010 the retail trade accounts for 12 % of the country's GDP and is expected to
approach 22% according to Indian Brand Equity Foundation. Another analysis
according to the Mckinsery 'The rise of Indian Consumer Market', foresees the
Indian consumer market growing by four times by the year 2025, the Indian Retail
industry is worth $300 billion in terms of value. The industry's contribution to the
Gross Domestic Product is about 10%, the highest compared to all other Indian
Industries.
Top leading Companies

Pantaloon

Pantaloon is the most popular and biggest retailers in India with more than 450
stores across the country.Headquartered in Mumbai, it has more than 5 million sq. ft
retail space located across the country.It has the following retail segments:

Food & Grocery: Big Bazaar, Food Bazaar Home Solutions: Hometown Furniture
Bazaar Consumer Electronics: e-zone
Shoes: Shoe Factory Books, Music & Gifts: Depot
Health & Beauty Care: Star, Sitara E-tailing: Futurebazaar.com Entertainment:
Bowling Co.

Tata Group

Tata group established in 1998 is another major player in Indian retail industry with
its subsidiary Trent, which operates Westside and Star India Bazaar. The group also
has acquired the largest book and music retailer in India 'Landmark' in 2005. Trent
owns over 4 lakh sq. ft retail space across the country.

RPG Group

RPG Group is one of the earlier entrants which were started in the year 1996 in the
Indian retail market, with the food & grocery retailing. Later it also opened the
pharmacy and beauty care outlets 'Health & Glow'.

Reliance

Reliance is one of the biggest gaint players in Indian retail industry. More than 300
Reliance Fresh stores and Reliance Mart are quite popular in the Indian retail
market. It is expected that in the year 2010 its sales would reach to Rs. 90,000
crores.
AV Birla Group

AV Birla Group has a strong presence in Indian apparel retailing with brands like
Louis Phillipe, Allen Solly, Van Heusen, Peter England are quite popular.

Other popular brands are Archies, Bata India Ltd, Big Bazaar, Crossword, Ebony
Retail Holdings Ltd., Fabmall, Food Bazaar, Globus Stores Pvt. Ltd., Health and
Glow, Liberty Shoes Ltd., MTR Foods Ltd., Music World Entertainment Ltd.,
Pantaloon Retail India Ltd., Shoppers Stop, Style SPA Furniture Ltd, Subhiksha,
Titan Industries, Lifestyle, etc. New entrants entering the market soon will be
Reliance Retail Ltd, Wal-Mart Stores, Carrefour, Tesco, Boots Group, etc.

Employment Opportunities
The retail sector has also contributed to 8% of the employment in the country.
Indian Retail Industry would generate employment for more than 2.5 million
people, predicts an analysis by Ma Foi Management Consultants Ltd. Today the
modern retail/retail services sector has the potential of creating over 2 million new
(direct) jobs within the next 6 years in the country (assuming only 8-10% share of
organized retailing), according to various analysts. Retail can create as many new
jobs as the BPO/ITES sector in India. A strong retail front-end can also provide the
necessary fillip to agriculture & food processing, handicrafts, and small & medium
manufacturing enterprises, creating millions of new jobs indirectly. Through its
strong linkages with sectors like tourism and hospitality, retail has the potential of
creating jobs in these sectors also.

Latest developments

The BMI India Retail Report analysis for the third-quarter of 2010, forecasts that
the total retail sales will grow from US$ 353 billion in 2010 to US$ 543.2 billion by
2014. With the expanding and developing middle and upper class consumer base,
there will also be opportunities in India's tier II and III cities. Their would be greater
availability of personal credit and a growing vehicle population to improve mobility
also contribute to a trend towards annual retail sales growth of 11.4%. Further
analysts predict that sales through MGR outlets will increase by 154% to reach
US$ 15.29 billion by 2014.
India today continues to be among the most attractive countries for global retailers.
Foreign direct investment (FDI) inflows between April 2000 and 2010, according to
the Department of Industrial Policy and Promotion in single-brand retail trading,
stood at US$ 194.69 million.
In 2010 China and India are predicted to account for almost 91% of regional retail
sales and in the year 2014 their share of the regional market is expected to be more
than 92%.
Worldwide Partner Inc are the Ninth largest global network of more than 90
marketing and communiation agencies in about 50 countries which has recently tied
up with Indian Pressman Advertising and Marketing Ltd following repeated
enquires about India.
The retail industry in India is currently growing at a great pace and is expected to go
up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1.3
trillion by the year 2018 at a CAGR of 10%. As the country has got a high growth
rates, the consumer spending has also gone up and is also expected to go up further
in the future.
In the last four year, the consumer spending in India climbed up to 75%. As a result,
the India retail industry is expected to grow further in the future days. By the year
2013, the organized sector is also expected to grow at a CAGR of 40%.

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