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Indian retail to be worth $8 B by 2005
Thursday, 20 January 2005, 20:30 IST
MUMBAI: Retailing industry in India is expected to grow at five percent per annum and is well on its way to becoming a 
350 billion ($8 billion) business by the end of the year, says an industry study report.
According to the study conducted jointly by Images magazine and retail industry consultant KSA Technopak, organised retailing is likely to grow at the rate of 25-30 percent per annum over the next few years.
At this growth rate, the organised retailing market will exceed 1 trillion in size by 2010. Its contribution to total retail sales is likely to rise to nine percent by the end of the decade.
The study said clothing and textiles constitute the largest block of organised retailing in India.
"If all fashion and lifestyle segments like jewellery, watches, health and beauty care services, and mobile handsets are considered one common group, then fashion would constitute about 60 percent of the organised retailing pie."
Of the retail segments, watches are the most organised business in India with 40 percent of the market being controlled by branded and organised players, said the study.
Other major organised retail segments are footwear, health and beauty care, entertainment and clothing.
Investments in the sector are estimated at 20 billion-25 billion in the next two to three years. This will rise to a staggering 200 billion by 2010.
"Stocks in the retail sector are becoming increasingly attractive from an investor's point of view as a result of successes of value-based concepts as well as development of retail space in smaller cities," said the study.
It said mall development activity in the small towns was picking up at a rapid pace. Prominent secondary cities that are witnessing a pick-up in activity include Surat, Lucknow, Vijaywada, Bhopal, Indore and Ludhiana.
From about 40 operational malls currently occupying nearly six million square feet of retail space, India is expected to have over 200 new malls by 2006 with retail space addition to the tune of 35-40 million square feet.
The study, however, pointed out that "clustering" of a large number of malls in a relatively small geographical area would emerge as a negative trend for the retailing industry.
"Of late, there has been a surge of international retailers in the country. Most of the global brands are introducing their latest collections in India even if it is at the cost of paying high import duties.
"Development of India as a sourcing hub is also an attractive retail opportunity for the global retailers."
Listing challenges for the industry, the Images-KSA Technopak study said ban on foreign direct investment in retail, stringent labour laws and lack of industry status that makes raising finance from banks are the major inhibiting factors.
"Opportunities are abundant and the influx of foreign brands into India will transform the retail landscape as domestic players grow bigger and become more innovative in the face of enhanced competitive pressures."
Source: IANS
350 billion ($8 billion) business by the end of the year, says an industry study report.
According to the study conducted jointly by Images magazine and retail industry consultant KSA Technopak, organised retailing is likely to grow at the rate of 25-30 percent per annum over the next few years.
At this growth rate, the organised retailing market will exceed 1 trillion in size by 2010. Its contribution to total retail sales is likely to rise to nine percent by the end of the decade.
The study said clothing and textiles constitute the largest block of organised retailing in India.
"If all fashion and lifestyle segments like jewellery, watches, health and beauty care services, and mobile handsets are considered one common group, then fashion would constitute about 60 percent of the organised retailing pie."
Of the retail segments, watches are the most organised business in India with 40 percent of the market being controlled by branded and organised players, said the study.
Other major organised retail segments are footwear, health and beauty care, entertainment and clothing.
Investments in the sector are estimated at 20 billion-25 billion in the next two to three years. This will rise to a staggering 200 billion by 2010.
"Stocks in the retail sector are becoming increasingly attractive from an investor's point of view as a result of successes of value-based concepts as well as development of retail space in smaller cities," said the study.
It said mall development activity in the small towns was picking up at a rapid pace. Prominent secondary cities that are witnessing a pick-up in activity include Surat, Lucknow, Vijaywada, Bhopal, Indore and Ludhiana.
From about 40 operational malls currently occupying nearly six million square feet of retail space, India is expected to have over 200 new malls by 2006 with retail space addition to the tune of 35-40 million square feet.
The study, however, pointed out that "clustering" of a large number of malls in a relatively small geographical area would emerge as a negative trend for the retailing industry.
"Of late, there has been a surge of international retailers in the country. Most of the global brands are introducing their latest collections in India even if it is at the cost of paying high import duties.
"Development of India as a sourcing hub is also an attractive retail opportunity for the global retailers."
Listing challenges for the industry, the Images-KSA Technopak study said ban on foreign direct investment in retail, stringent labour laws and lack of industry status that makes raising finance from banks are the major inhibiting factors.
"Opportunities are abundant and the influx of foreign brands into India will transform the retail landscape as domestic players grow bigger and become more innovative in the face of enhanced competitive pressures."
Source: IANS