Another Emerging Market
Close to 2.2 billion dollars will be invested in the new retailing market in India
SYED IRFAN SHAFI
The earliest retailing in India started with the ‘paan shop’ concept, a small shop, more often in a size ranging from 20 square feet selling betel leaves (paan), cigarettes and ‘bidi’. A little larger version came into existence which is known as the ‘Kiryana’ store and this store sells grocery also to the needs of the local people. These small stores are very large in number in India and are run by families. Hence, they are popularly known as ‘mom and pop’ stores. Later, Departmental Stores and the government subsidized Super Stores selling clothing fabric, apparel and other life style products came into existence. Now, corporate organizations realizing the significance of retailing are opening their stores nationally bringing in the ‘Chain Store’ concept. Alongside this retail growth we now see the evolution of many large Malls and Hypermarkets, which are a destination for happy shopping, dining and entertainment. Retailing in India is unique as even today all the forms mentioned above are coexisting.
The Key drivers of growth of organized retailing in India are the following:
Growth of consumerism, changing life style, availability of numerous brands - both national and international, increased media exposure and higher spending power of the consumer have increased the levels of domestic consumption in India. India has an enviable customer base with its vast 1 billion above population, which has 890 million people under 45 years of age and over 480 million classified as middle class population. India is a glorious market and the number of effective middle class consumer is expected to rise to over 600 million by 31 march 2012. The positive attitude of the Government and its desire to further open up various sectors and privatize some viz. telecom, energy, aviation, insurance, infrastructure, etc. is resulting in the constant upgrading of products, processes and services for our customers. It is expected that in the next two years modern retail will provide 2.2 million jobs and provide local employment opportunities. This will see a good proportion of ‘first time’ employment and 20% of organized retail employees will be tax payers. Of the total employees, 50% or more will be women and this will empower women more. To cater to this huge demand for human resource, many educational institutes have started offering specialized retail courses and training.
The retail infrastructure is developing fast as 100% FDI in real estate development projects is allowed. About 40 million square feet of retail space will be created over next 5 years by existing retailers and this growth will enable more retail stores to be established in India in future. Close to 2.2 billion dollars will be invested in warehousing and distribution, fine tuning supply chain management and this will enable faster reach of products to consumers at less expenses, reducing considerably wastages in the supply chain. With its inherent technology strengths and advanced technology development in retail, India can look forward to becoming the backbone and backend management of global supply chain. Enterprise Resource Planning packages have been deployed in the top Indian retailing companies and soon Electronic Data Interchange efficiencies will be achieved. Bar-coding all products following uniform standards will enable easier product identification, product tracking and product replenishment processes.
The status of the retail sector will depend a lot on external factors like government regulations and retail estate prices, besides the strategies and activities of the retailers and demands of the customers. Some other factors that will propel growth are increased investments, a faster pan-India spread, allowing retail to work 24 hours 7 days a week and creating a single-window for obtaining licenses to open and run stores in India. Organized retail is poised to grow and see its boom time. For many, modern retailing in India is going to be the future as it has the capability to percolate into smaller towns and even villages. The opportunity for retailers to yet enjoy the first mover advantage is there for the taking and retailing will grow from strength to strength in India in all product categories.
Author is Doctoral Research Scholar, at Pondicherry University. Reach him at email@example.com
Lastupdate on : Mon, 12 Nov 2012 21:30:00 Makkah time
Lastupdate on : Mon, 12 Nov 2012 18:30:00 GMT
Lastupdate on : Tue, 13 Nov 2012 00:00:00 IST
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