News: $30 bn investment in retail sector within 4-5 years

(BL 25/02/2007) New Delhi - A good talent pool, unlimited opportunities, huge markets and availability of quality raw materials at cheaper costs is expected to make India overtake the world's best retail economies by 2042, according to industry players.

While the concept of retail is not new to India, modern retail concepts are fairly new, which would need the industry to share knowledge and get greater exposure to international retail brands, opined industry players at Technopak's 8th Marketing and Retail Conclave.

Retail gurus felt that the growth in the Gross Domestic Product (GDP), coupled with rising income levels is leading to increased purchasing power of the middle class. This would change the outlook of retail business in the country.

The retail industry in India, according to experts, will be a major employment generator in the future. Currently, the market share of organised modern retail is just over 4 per cent of the total retail industry, thereby leaving a huge untapped opportunity.

The sector is expected to see an investment of over $30 billion within the next 4-5 years, catapulting modern retail in the country to $175-200 billion by 2016, according to Technopak estimates.

The Retail Conclave also saw the release of the CIES Top-of-Mind Issues Survey and the Images-Technopak Apparel Report 2007.

According to the CIES (the Food Business Forum) survey, the top five issues identified this year were consumer health and nutrition, retailer supplier relations, retailer brand/offer, technology and supply chain and social compliance.

"With global concerns over obesity rising rapidly, the expected responsibility of the food retailer is to make healthy eating easier.

According to the global social compliance programme, the improvement of global working conditions of the supply chain were very important since approximately 59 per cent of consumers bought food products on ethical or ecological grounds," said Alan Clay, Chief Executive Officer, CIES.

Amitabh Taneja, Chief Convenor of the India Retail Forum, quoting figures from the released Apparel Report, said, "Of the total organised retail market of Rs 55,000 crore, the business of fashion accounts for Rs 30,080 crore, which translates into nearly 55 per cent of the organised retail segment in the country."

While R.S. Roy, Editorial Director of the Images Year Book, revealed that the total fashion sector was estimated at Rs 1,91,400 crore and forms about 15 per cent of the country's retail market of Rs 12,00,000 crore.

"Commanding such a large chunk of the organised retail business in India, fashion retailing has indeed been responsible for single-handedly driving the business of retail in India," added Roy, citing that the Indian apparel market grew at 14.7 per cent in 2006.