Indian Retail to Comprise 25% of Retail Revenue by 2011

As per Deloitte Haskins and Sells, the Indian organized retail market is rapidly growing and is expected to account for 25% of the total retail revenue by 2011.

A study by the accounting company Deloitte Haskins and Sells has found that the organized retailing in India is growing faster than anticipated. As forecasted in the study, the organized retailing could represent one-fourth of the total retail revenue by 2011 from its present 8% share, as reported by Livemint.

Presently, both organized and unorganized retail sectors in India are valued at $295 Billion (Rs 12.3 Trillion). The growth in the Indian organized retail market is primarily due to change in customers’ behavior owing to rise in income, changing lifestyles and demographic patterns – the most essential factors for the growth of the retail industry of any nation.

Moreover, the retailing framework is also growing at a rapid pace. Shopping malls are gaining popularity in India with new projects for shopping malls are being announced. Indian supermarkets have also captured a large chunk of the Indian food and grocery market. Customers also prefer to shop at a place where they get food, recreation and shopping facility under one roof that has boosted the Indian organized retail market.

Also, rising customer spending capacity and availability of credit is promoting organized retail market in India. By 2011, the growth in the Indian organized retail market is projected to grow strongly due to growing income, which will be further supported by the favorable demographic patterns. The success of organized retailers in India is largely due to reaching prospective customers at the lower end of the income graph.

However, as the retail market in India is growing, the distribution is also getting better, but it still continues to be a disorganized area. Poor standard infrastructure, together with weak distribution sector, cause high logistics costs, which is very high in terms of proportion of GDP.

According to a Research Analyst at RNCOS, “The biggest challenge in the Indian consumer market is distribution and marketing cost. Decline in distribution and marketing prices could allow retail sales to grow as anticipated. The Indian retail firms and retailers can apply innovative methods to cut down this cost, such as upgrading the existing infrastructure and introducing new methods like public relation to sustain growth in organized retail sector of India

This article was first seen on: http://www.rncos.com/Blog/2008/06/Indian-Retail-to-Comprise-25-of-Retail-Revenue-by-2011.html