Modern retail gains ground in India

NEW DELHI: Modern retailers are set to significantly enhance their revenues in India over the period to 2015, but will remain very much in a minority position in terms of market share, a report has predicted.

According to a study from Iris, the research firm, the retail category should reach a value of $907bn in 2015, compared with $541bn in 2012 and $402bn in 2010.

More specifically, modern retail formats are likely to generate revenues of $92.5bn in three years' time, measured against returns of $42.4bn this year, and $26.4bn two years ago.

As a result, organised chains are pegged to see their share of the market increase from 7.8% in 2012 to 10.2% in 2015, although this lags behind many other nations in Asia.

However, the sector logged a compound annual growth rate of 26.8% from 2010–12, a figure placed at 29.7% for 2012–15. This will outpace the expected improvement of 18.8% for the industry as a whole.

"Growth has been pushed, mostly, by thousands of local and regional brands and retailers, and the next generation of traditional retailers who are now adapting to change and switching over to modern ways of retailing," R S Roy, editorial director of Iris's India Retail Report, told Indiaretailing.com.

The total number of stores should rise from 36,830 in 2011 to 67,100 in 2016. Supermarkets are due to see an increase from 4,000 to 8,500 branches, while discounters will grow from 1,500 to 4,000 sites.

Similarly, the amount of hypermarkets is projected to more than treble to 1,000 in this timeframe, with convenience stores also enjoying a five-fold expansion to 2,000 branches.

Equally, an estimated 1,400 department stores are likely to be operational by 2016, versus 600 in 2011. Speciality and single brand stores will remain dominant overall, growing from 30,000 to 50,000 outlets.

In 2012, organised retailers will be at their strongest in the clothing and apparel segment, taking a 33% share. Mobile and telecoms chains, in second, could register just 11% here, the same total as food and grocery.

By contrast, these ratings stood at around 3% for beauty and personal care, falling further, to 2%, for pharmacies and watches, and only 1% for glasses.

Data sourced from Indiaretailing.com; additional content by Warc staff, 12 October 2012

SIMILAR NEWS