Retail industry in India is greatly fragmented comparing to the developed and other developing countries. This presents enormous prospective for the structured retail industry to flourish throughout the country, as the market for the final product is huge. Retail industry is largely led by private companies. The distribution for fast-moving consumer products includes many layers like carrying and forwarding agencies, distributors, wholesalers, stockists and retailers.
The Indian retail environment has attained $ 210bn quiche, witnessing a strong development pace of five percent per year (according to a latest survey by Price Waterhouse Coopers). As per the estimation 200 malls, presenting additional 50mn sq ft of retail space will be ready in next two years. Existing retail space in 160 malls is nearly 32mn sq ft.
Organized retailing now accounts for three percent out of the total retailing, however is predicted to extend to 10 percent by the year 2010. In other means, organized Indian retail sector would triple its share of the total market within the coming four years, generating new 8mn jobs, in addition to the 21mn jobs that are already created by retail sector. As per the estimate, the current retail business witnesses more than 12mn retail outlets, which include all shapes and formats.
The analysts foresee bright future of the retail sector. A huge number of shopping malls, nearly 100, have come up in the recent past, generating 20mn sq ft. retail space, extending more space of about 12mn sq ft to it. Nearly 60 malls are on the verge of completion and may be operational by the end of current financial year. A forecasted number of nearly 200 malls, in a move to make additional 50mn sq ft of retail space, will be completed within the next two years.
According to analysis by KSA Technopak, India has lowest per capita retail space accessible around the globe. The study depicts that India require generating at least 110mn sq ft of additional retail space a year for many years, only to meet the demand generated on account of a continued GDP growth rate of nearly 6 percent. Hitherto, the Central Government as well as State Governments and local municipals have failed to match steps with drag on the economy of an incompetent retail sector. This space crisis is leading to a condition, in which prime locations demand extremely high rates.
To make India's emerging retail market open to foreign direct investment (FDI) has been on the
Government agenda since long time. A number of transformations and practices were being done, but the sources disclosed that the policy, which is under finalization is such that FDI in the retail market would lead towards the rear connections of manufacturing and production and not only set aside to open of retail stores of global and imported brands.
The global retail giants like Wal-Mart, Gap, Tesco, Versace, K-Mart/SEARS, Carrefour, ZARA, FCUK, Fendi, NEXT, Mother Care, lKEA, Trussardi, DKNY and Debenhams have made plans to march in the Indian market. ESPRIT, GUESS, Chanel, Mango and many other global marked their presence in India by implementing licensing and franchisee agreements. The global retailers on the line of control, awaiting the green signal from Govt to enter Indian retail market. However, the current scenario has encouraged Indian players to speed up retail expansion and fresh retail ventures.
Companies like Shoppers Stop, Trent, Reliance, Lifestyle, Tanishq, Crossroads, Akbarallys' and Tanishq already have planned to invest over Rs 5,000cr. Trent is on the edge to take both its brands 'Star India Bazaar' and 'Westside' to new cities, meanwhile Shoppers' Stop has recently geared up for expansion of present ones and to add 11 new stores including two hypermarkets. Also, Pantaloon has planned to add eight 'Big Bazaar' malls within the next 6 to 8 months.
After demergel, Reliance Industries Ltd (RIL) is substantially getting ready to enter in field of retailing. RIL is poised to emerge as the single largest player in this sector. On the other hand, Tescos, Wal-Marts or Safeways ultimately enter in the country. So finally, Shoppers' Stops, Westsides, Pantaloons and Westsides in coming years have will face stiff competition. More than the Tescos and Wal-Marts, Reliance, Godreg and Tata are likely to attain reach to the country's interiors.
At the same time, several apparel exporters are keen to get opportunities in retail sector. Gokaldas Images, OC, TCNS, Gokaldas Exports and Celebrity Fashions are some of the exporters who already have expanded into retail sector with triumph.