19 Sep Retail Industries In India
The growing urbanization, advanced technological environment, varying demographics, and several players entering the Indian Retail market has led India to become one of the topmost preferred destination for retail investments in the world and ranks 15th in the Global Retail Development Index. Accounting for almost 10% of the country’s GDP (Gross Domestic Product) and over 8% of the employment, the Indian Retail Industry is expected to nearly double to USD 1.3 trillion by 2020.
The industry is classified into two groups, namely, the unorganized retail and the organized retail. While the unorganized retail is the radiating force of the retail industry in India which includes unauthorized shops, corner shops, general shops, the Kirana stores, and other small retail outlets; the organized sector has seen some potential growth in the recent years comprise of licensed traders who are registered to pay taxes to the government.
Among the major factors that contributed in the growth of Indian retailing business, integration of technology is something to deem in the past few years. The use of electronic systems for merchandising planning, control inventory costs, client dealing, replenishment of goods, internal store billing, and management is definitely one major reason that has changed the face of the entire industry. The virtual format, not only in terms of managing business capital or generating bills, but also running business online is one of the hottest trends of the industry today. With more and more customers wanting to be served goods at doorstep, the Indian retail industry is sure to expand more.
Currently, the estimate value of the retail sector of India is around USD 600 billion and is expected to proliferate in the coming years. The modern retail valued at USD 27 billion, alone, is expected to grow six times across all segments and categories. According to Boston Consulting Group and Retailers Association of India report titled Retail 2020: Retrospect, Reinvent, Rewrite; “While the overall retail market will grow at 12% per annum, modern trade will grow twice as fast at 20% per annum, and traditional trade at 10%.”
The growing middle class has led the organized sector of the Indian retail industries to grow exponentially in the recent years despite its downtrend. The massive economic growth in the consumers has further increased the current consumption levels in India which is predicted to multiply within five years from USD 750 billion to over USD 1.5 trillion. This tremendous shift in the economic sector, consumption levels, and related attributes give us a hint of the growth rate of the retail industries in India, which is huge. Predictions can also be made of an increase in the Foreign Direct Investment in the retail sector.
The Retail Sector is one of the sunrise industries in India. And with approval of 100% FDI in single-brand retails and 51% in multi-brand retails by the government, the industry will be able to deliver an even better growth in future. However, environmental concerns and social responsibility will gain a significant place in retailers’ decisions and consumers will have a better control over the market.