Of all the commercial segments in India, the retail sector is biggest both in terms of revenue generation and employment contributing to more than 10% of the national GDP and employing nearly 9% of the entire workforce. The retail industry has indeed come of age in India as it has witnessed an extraordinary growth in the past ten years.
Indian conglomerates specializing in apparels, beverages, healthcare, footwear, food processing, watches, and digital gadgets etc have buttressed their presence in the country by opening up more outlets in the Tier-I cities and setting up shops in Tier-II and Tier-III cities and towns. Foreign retail companies like Metro, Tesco Plc, IKEA, and Bosch, and numerous other world famous retail brands have heavily invested in the country.
The Indian retailing industry is expected to be worth over US$ 500 billion making it one of the top notch retail hubs in the world. The sector is growing exponentially with a CAGR (compounded annual growth rate) of 25%. The food and food processing segments are the key players in the retail industry in India.
The shopping modes and patterns have also underwent a sea-change with more and more Indians preferring to shop in plush supermarkets and multi-level shopping malls that offer almost everything under a single roof. India’s burgeoning middle class with most of the shoppers in the age bracket of 24-36 having large disposable incomes is looked upon as a potential commercial market that every retail giant wants to tap. Online shopping has caught on in a big way as well.
The mushrooming of online retail outlets and shops in India amply testifies to the fact that online retailing and shopping is growing in popularity with every passing day. Statistically speaking, online retail infiltration or incursion is about 60%. The retail industry is anticipated to expand rapidly in the coming years with the Indian government implementing favourable policies with a view to removing the roadblocks and accelerating the pace of development.
The ‘Ministry of Food and Consumer Affairs’ reports that the retailing sector will be approximately worth US$ 1.3 trillion by the turn of this decade (2020). The foods segment will continue to dominate the retail scene. The retail section comprising smartphones, tablets and other e-gadgets is expected to chart a 20% growth in the next 10 years. FDI inflow in the last 13 years was about US$ 98 billion in single-brand retail business.
India’s urban population has taken hugely to online shopping. India is poised to become of the key nations where approximately 40% of the entire retail trade in all the major cities and towns will be executed online in the subsequent 8-10 years. Of all the products sold online, consumer durables will occupy the top slot accounting for almost 34% of total sales. Of the total online sales across all product categories, non-metro towns will account for more than 50% of the same.