Services: Over 100% growth in demand for key services in the next 5 years
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OVERVIEW | OPPORTUNITIES

Total estimated investment opportunity of US$ 5-6 billion in 5 years    Photograph of indian girls buying cloths

Retail

 

OVERVIEW

SIZE

  • India is one of the 10 largest retail markets in the world
  • Retail sales were US$262 billion in 2006, constituting over 30% of India’s GDP
  • “Organised Retail” constitutes only 4.6% of total retail sales - about US$12 billion p.a.
    • Has been growing at over 40% p.a. in the last 2 years
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STRUCTURE

  • The Indian retail sector is highly fragmented: mostly owner-run “Mom and Pop” outlets
  • There are over 15 million such “Mom and Pop” retail outlets
  • Retail chains such as Pantaloon, Trent and RPG Retail have been growing rapidly; while Reliance, Bharti and Aditya Birla Group have announced investments of over US$9 billion in the sector
  • Dairy Farm, Metro, Shopritem, Wal-Mart and Marks & Spencer are some of the major international retail chains that are already present or in the process of entering the market
  • More than 100 international luxury brands are planning to set up shop in India
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POLICY

  • 100% FDI is allowed in Cash and Carry Wholesale formats. Franchisee arrangements are also permitted in retail trade
  • 51% FDI is allowed in single brand retailing
  • The government is examining further liberalisation of FDI in retail trade
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Top Players in the Retail Industry
Players Revenues for
2006-07
in US$ millions		 Retail Space as on May 2007 (Sq. ft.) Format
Future Group (Pantaloon Retail) 821.0 6,630,000 F&G, Specialty
Raheja Group (Shoppers’ Stop) 219.7 1,590,000 F&G, Specialty
Tata Group (Trent, Infiniti Retail) 145.2 880,000 Speciality Retail, Electronics, Hyper Markets
RPG Retail 146.0 810,000 F&G, Specialty
A V Birla Group 61.0 890,000 F&G
Source: TSMG
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OPPORTUNITY

Apparel retail is the largest organised segment
in India
  		Reaching out to fulfill the needs of the modern customer
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OUTLOOK

  • The overall retail market is expected to grow from US$262 billion to about US$1065 billion by 2016, with organised retail at US$165 billion (approximately 15.5% of total retail sales)
    • India is expected to be among the top 5 retail markets in the world in 10 years
    • India has been identified as the most attractive destination for retail in AT Kearney’s Global Retail Development Index
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POTENTIAL

  • The high growth projected in domestic retail demand will be fuelled by:
    • The migration of population to higher income segments with increasing per capita incomes
    • Increasing urbanisation
    • Changing consumer attitudes, especially the increasing use of credit cards
    • Growth of the population in the 20 to 49 years age band
  • There are retail opportunities in most product categories and for all types of formats
    • Food and Grocery: the largest category but largely unorganised today
    • Home Improvement and Consumer Durables: over 20% p.a. CAGR estimated in the next 10 years
    • Apparel and Eating Out: 13% p.a. CAGR projected over 10 years
  • Opportunities exist for investment in supply chain infrastructure: cold chain and logistics
  • India also has significant potential to emerge as a sourcing base for a wide variety of goods for international retail companies
    • Many international retailers including Wal-Mart, GAP, JC Penney etc. are already procuring from India
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For additional information: Ministry of Commerce and Industry (http://commin.nic.in)
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