The last few months have been extremely busy for all our analysts. However, before we end the year, we would like to report the status of the Indian Retail Industry after the Boom, 2009 Bust and Stabilization cycle of 2010.
India is the fifth largest retail market globally, with a size of US$500bn., and has been growing at 7% per annum. Retail is the India’s industry of the future. The growth of organized retail also helps reduce the inefficiencies in trade – a win-win situation for farmers and consumers. It can also be a big source of employment, more so for unskilled labour.Organized retail accounts for just 5% of total retail sales and has been growing at 35% CAGR.
Organized Retail Market Share End 2010
Apparels / Clothing – 37%
Consumer Durables – 20% & Beverage – 18%
Footwear – 8%
Home Decor – 6%
Jewellery – 6%
Books, Musics & Gifts – 3%
Beauty & Wellness – 2%
The 2 Key Challenges Industry is facing are – Severe shortage of talented professionals, especially at the middle-management level and Lack of adequate infrastructure with respect to roads, electricity, cold chains and ports.
Finally, India has kept the retail sector largely closed to outsiders to safeguard the livelihood of nearly 15 million small store owners and allow only 51% foreign investment in single brand retail with prior Government permission.
We will have a look at Food & Beverage Industry in Detail in our next post tomorrow as one of the analysts on the job seems to have done a commendable job and wish to share excerpts from this report.