The Indian retail market has grown at 10 percent per year over the past 5 years. According to the A T Kearney Global Retail Development Index (GRDI) India has retained the number one position as the most attractive emerging country for retail till from 2005 till last year. Now, According to the GRDI 2008, India has slipped to number two positions losing to Vietnam.

Indias retail market is at its pinnacle and is drawing huge attention from both global and local retailers. Reasons for Indias high growth rate in the retail sector are:

• High growth rates- Indias GDP is projected to grow by more than 8 percent in fiscal year 2008, projections for 2009 are a more modest at about 7 percent
• Untapped growth potential- Organized retail, which still accounts for less than 5 percent of the market is expected to grow at a compound annual growth rate (CAGR) of 40 percent to $107 billion by 2013. Indias overall retail sector is expected to rise to $833 billion by 2013 and to $1.3 trillion by 2018, at a CAGR of 10 percent.
• Growing Purchasing Power- Consumer spending is on a sharp rise. In the last four years the consumer spending has grew by astounding 75 percent. This can be attributed to the significant rise in the disposable incomes of Indias young population. It has to be noted that more than 33 percent of Indian population is below the age of 15.

Apparel Retail Industry

The recently released A T Kearney Apparel Retail Index evaluates more than 30 emerging markets in the apparel segment of retail industry and further identifies the top 10 countries in terms of market size, growth prospects and consumer affluence.

A.T. Kearney retail apparel index, 2008

As per the Index, Brazil leads the pack as the most attractive emerging apparel retail destination in the world. It is the fastest growing market growing at the rate of 7% p.a. The positive trend has been mainly due to the dominant young population in Brazil- almost 60% of the total population is under 29 years of age. Also, the per capita spending of $402 which is almost six times what a Chinese individual spends on apparel. Like India, Brazils domestic retail is highly fragmented. The market is dominated by small local retailers which constitute about 60% of the total market share. This makes it an unexploited market for the international retailers.