INDIAN RETAIL SCENARIO
The word retail is derived from the French word ‘retailer’, meaning ‘to cut a piece off’ or ‘to break bulk’. Retailing involves a direct interface with the customers and the coordination of business activities from end to end. The retail scenario in India is unique. Much of it is in the unorganized sector. With over 12 million retail outlets of various sizes and formats. Almost 96% of these retail outlets are less than 500sq.ft. In the size and the percapita retail space in India being 2 sq.ft compared to the U.S. figure of 16sq.ft. India’s percapita retailing space is the lowest in the world. With more than 9 outlets per 1000 people, India has the largest number in the world. Most of them are independent and contribute as much as 96% to total retail sales. There is an incredible amount of activity in terms of creation of retail-oriented space across India. As per some estimates, there are over 200 retail mall projects under construction or under active planning stage spanning over 25 cities. This may translate into over 25 million sq. ft. of new retail space in the market within next 24 months. Present Indian Scenario • Unorganized market: Rs. 583,000 crores • Organized market: Rs.5, 000 crores • 5X growth in organized retailing between 2000-2005 • Over 4,000 new modern retail outlets in the last 3 years • Over 5,000,000 sq. ft. of mall space under development • The top 3 modern retailers control over 750,000 sq. ft. of retail space • Over 400,000 shoppers walk through their doors every week • Growth in organized retail on par with expectations and projections of the last 5 Years on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2005-06 Organized retail formats in India Each of the retail stars has identified and settled into a feasible and sustainable business model of its own: • Shoppers’ Stop Department store format • Westside Marks & Spencer model of 100% private label • Giant and Big Bazaar Hypermarket/cash & carry store • Food World and Nilgiris Supermarket format • Pantaloons and The Home Store Speciality retailing • Tanishq High quality organized retail business The retail business in India in the year 2000 was Rs. 4000,000 crore and is estimated to go to Rs. 800,000 crore by the year 2005,an annual increase of 20%. The contribution of the organized retail industry in the year 2000 was Rs.20, 000 crore and is likely to increase to Rs. 160,000 crore by 2005. According to the survey conducted by Federation Of Indian Chambers Of Commerce & Industry [FCCI] and price water house coopers indicates that the Indian retail sector will under go a sea change in size as well as formats in the next 10 yrs. It also expects that by 2010 the country’s top retailers will operate at least 3 to 4 format, all scalable to size, location and providing value to their target customers. Change Accelerators The following factors will be significant in driving growth in the retail sector: • Consumer factors • Increase in income • Workingwomen • Changes in lifestyle – demand for “global” trends • Supply side factors • Growing importance of retailing in political and economic agenda • Real estate reforms to be undertaken in the next 24 months • Major restructuring of the manufacturing sector easing product supply constraints for efficient retailing • Reduction in import duties-offering more global sourcing options Human Resource Issues And Concerns In Retail Industry: • Manpower planning • Recruitment • Motivation and retention and building reward system that ensure performance orientation.