The Indian retail market has grown at a double-digit compound annual growth rate over the last five years and was worth an estimated $554bn in 2011. The Indian economy grew throughout the global downturn, with increasing consumer purchasing power bolstering the retail sector. Retailing is now the second highest contributor to India’s gross domestic product.
Features and benefits
- Uncover the main opportunities available in the Indian retail market across Clothing, Grocery, Electricals, Health and Beauty and Homewares
- Understand the size of the Indian market by sector and the growth forecasts to 2015
- Understand the key financial, cultural, political and logistical reasons that has so far held back the development of modern retail in India
- Discover which retailers are operating in India and with which local partners
Highlights
Confusion reigns over India’s FDI policy. Currently international food and grocery retailers are prohibited from entering the Indian market, except through cash and carry wholesale trading, but the government announced plans to lift restrictions in 2011, but then committed an embarrassing u-turn just weeks later.
The emergence of modern retail started in the major cities of Delhi, Mumbai, and Bangalore, and the satellite towns which have developed around them due to the huge influx of young professionals. Modern retail is concentrated in just a few cities, and premium locations there have already become saturated.
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Report Details:
Published: July 2012
No. of Pages: 136
Price: Single User License: US$ 4495 Corporate USer License: US$ 11238
Employing 8% of the total work force, retail is the second largest employer in the country. The majority of these workers are self-employed, as India has a huge base of traditional retail outlets which are often family-owned. At present, modern retail represents only 5–7% of total retail in India.
Your key questions answered
- Why has India’s organised retail sector taken so long to develop, and what is continuing to hold it back?
- How large is the retail opportunity in India, and which sectors are most amenable to entry by foreign retailers?
- Which international players are operating in India and who do they partner with?
Table of Contents
OVERVIEW
Summary
KEY FINDINGS
India’s retail market is booming due to increased consumer purchasing power
The changing face of Indian consumers is shaping the future of retailing in India
Traditional retailers dominate Indian retail, although modern retail outlets are proliferating
India’s untapped potential has put it on the radar of global retailers
Increased demand for luxury products is hampered by poor infrastructure
Retailers are moving to tier II and III cities following saturation in metropolitan cities
Retailers look to secure revenue-sharing deals with real estate developers, due to the high price of rental space
Confusion reigns over government FDI policy
Reassuring consumers about security is key to the growth of e-commerce
ACTION POINTS
Clothing
Adopt a fast-fashion strategy to keep pace with the emerging fashion-conscious youth
Introduce fashion which is suited to a diverse base of Indian consumers
Look to create new occasions and deliver relevant products
Capitalize on the increase in affluent consumers
Execute a multi-channel strategy to target a wider audience
Electricals
Capitalize on the lower penetration of consumer electronics and appliances in rural areas
Explore the option of getting into smaller cities through joint ventures and franchises
Introduce private label products for price sensitive consumers
Partner with financial institutions to facilitate the availability of consumer finance
Grocery
Develop online services to attract urban professionals
Retailers need to be more attentive towards product categories that are more vulnerable to reduced customer spending
Also introduce more variety of international products
Use promotional schemes like everyday low pricing and buy one get one free offers
Look at opening more outlets in commercial areas or office complexes
Homewares
International retailers should take into account the climate and seasonal behavior
Target young professionals
Leverage the growing demand for contemporary yet affordable furniture
Health and beauty
Pay close attention to consumers’ changing usage patterns of personal care products
Represent actual user opinion, which is emerging as a powerful marketing tool
While focusing on driving sales volumes from middle income groups, retailers should encourage existing consumers to trade up
