India's retail industry to touch $600 bln by 2015

New Delhi, Aug 1: Retail industry in India will touch 0 billion by 2015, according to Bharti Enterprises Managing Director Rajan Bharti Mittal.

Speaking at the PHD Chamber CEO Lecture Series here on the theme 'Retail : Opportunities&Challenges', Mr Mittal said that while retail as a whole is growing at a compound annual growth rate of eight per cent, and by 2015, the total retail market in India will touch 600 billion dollars.

The organised retail sector, presently at 13 billion dollars is growing at 27 per cent annualy and by 2015, is expected to touch 110 billion dollars.

He said organised retail constitutes less than five per cent of the estimated total retail trade of 284 billion dollars. In the overall retail space, food and groceries occupy 63 per cent, while clothing and accessories account for the largest volume at 39 per cent in organised retail. Food, grocery, health and beauty, entertainment are among the fast growing categories.

''India is a huge market and there is enough space for atleast 8-10 large retailers. Consolidation trends are visible in the retail sector and the real growth wave will come from tier I and II towns and the current players in the market are following an aggressive roll-out and there is a battle for real estate,'' Mr Mittal.

Organised retail is aggressively investing to improve infrastructure and remove intermediaries in the supply chain and cold chain investments are on the rise.

There will also be significant benefits to small-scale and ancillary industries as worldwide, 70-90 per cent of all products sold in modern retailing are domestically sourced.

The food processing and services industry, he said, will benefit through better cold chain, display and marketing with organised retailers. Currently, only 4.5 per cent of the food market is processed food, whereas the international benchmark is above 40 per cent.

Mr Mittal believes that contrary to general perception, the 'mom and pop' stores will not lose out, according as efficient supply chain, leading to sourcing of wider assortment of products at one place and at better prices, will result in operational efficiencies for the such stores.

There will also be potential for these stores to become franchisees or partners for larger retailers through investment in merchandising, IT systems and overall upgradation of the stores.

The world over the mom and pop stores co-exist with modern retail as their personalised service always attracts customers, he said.

UNI