The Indian retail segment accounts for 22 per cent of the country's gross domestic product (GDP) and contributes about 8 per cent to the total employment. India continues to be among the most attractive investment propositions for global retailers. As the retail sector witnesses unprecedented growth, India has emerged among the most desirable retail destinations in the world. Even though modern trade is growing at 15 to 20% per annum, it has a low organised retail penetration of just 8%.
India has emerged as the fifth most favourable destination for international retailers, outpacing the UAE, Russia, Indonesia and Saudi Arabia, according to A T Kearney's Global Retail Development Index (GRDI) 2012.
The Indian retail market currently stands at USD 396 billion and is likely to grow at 12% to increase to USD 574 billion by 2015. This sector is the second largest employer after agriculture, employing more than 35 million people with wholesale trade generating an additional employment to 5.50 million more. The growing disposable income in the country is resulting in increasing consumer spending habits.
The total retail spending is estimated to double in the next five years. Of this, organised retail—currently growing at a CAGR of 22%--is estimated to be 21% of total retail expenditure. The food and grocery segment is the highest contributor to the retail sector with maximum contribution coming from traditional retailing, while penetration of modern retail is highest in the clothing and fashion segment, at 23% of growth.
The emerging organised retail in India, for example, the construction of mega malls and shopping malls, is augmenting the growth of this sector. Besides, with factors such as large youth population, rising income and purchasing power, changing mindset of customers, easy customer credit and high brand consciousness makes the business environment conducive for growth.
The sector is set for higher growth with relaxed FDI norms and large retailers expanding their business in tier II and tier III cities offering specialised products and convenient shopping options.
We are privileged to work with largest retailers in India. The success of our business is founded on making a difference on each and every engagement with these clients.