INTRODUCTIONRetailing as we can say is the sale ofgoods or assets from a fixed or particular place, such as a department store,in small quantities for direct consumption by the purchaser. Retailers are atthe end of the supply chain.
Vendors of production products consider the retailprocess a necessary part of their overall distribution strategy as retailingprovides them a reach to the market without which the company or product has nolife. Globally, the contribution of retail sector to the world’s GDP is almostabout 27%. Now, if we talk aboutthe retail industry in India, we can say that it is undoubtedly one of the fastestgrowing retail industries in the world. Being the largest of all industries andaccounting about 10% of the country’s GDP, it employs about 8% of the workforce.
In India, there has been seen a drastic commercial revolution in terms ofpurchasing behaviour of consumers that is a modernization and development fromshopping malls to multi-storey shopping malls that offer shopping, entertainmentand food under one roof. It is because of this trend that the retail sector iswitnessing a revolution like many new formats markets such as hypermarkets, supermarketsand department stores. India was also the main supply destination in the worldin 2016-17 and participation in this category is 55 percent. In India, much ofthe middle class and even the untapped retail market is an attractive force forall retail giants worldwide.
Our active population with an average age of below25 years, along with emerging opportunities in the retail sector, is one of themain growth factors in the Indian retail sector. Growth in the retail sector ispositively expected, as many new entrepreneurs are entering the retail sector. Thetotal retail industry is estimated at 9 lakh crore, of which the organized sectorrepresents only 9 percent, indicating a large potential market opportunity. India’sretail sector is experiencing accelerated growth and retail development isoccurring also in Tier-II and Tier-III cities and not only in large cities andmetropolitan areas, which people presume it to be growing.
The purchasing powerof the consumer plays an important role in the decision making or the lifestyleof the people and here we can see that the purchasing power of the Indianconsumer is growing in categories such as clothing, cosmetics, footwear, watches,drinks, food and even jewellery. Due to the expansion of the middle men followingtheir purchasing power and the ease of doing business where there is asimplified tax structure after the introduction of the Goods and Service Tax,India can foresee and expect growth in the Retail Industry. MARKET SIZE AND CHARACTERISTICS MARKET SIZE OF THE INDUSTRY The Indianretail industry is one of the fastest growing industry in the world.
India’sretail sector is expected to grow to $ 1,100 billion in 2020, from $ 672billion in 2017. India is thefifth favorite retail destination in the world. The country is among thehighest in the world in terms of availability of stores per capita. The Indianretail sector is experiencing an exponential growth and retail development isoccurring not only in large cities and metropolitan areas, but also in level IIand III cities. This growth and development proportionally increases the sizeof the retail market as well. Healthy economic growth, an evolving demographicprofile, an increase in disposable income, urbanization, tastes and changingconsumer preferences are other factors behind the growth of the retail marketorganized in India. Even the online retail market is expected to increase from$ 14.5 billion to $ 60 billion between 2016 and 2020.
Global retailerssuch as Walmart, GAP, Tesco and JC Penney are increasing their purchases fromIndia and are moving from third-party purchasing offices to establish theirfully-managed and fully managed purchasing and purchasing offices. The Indiangovernment has introduced reforms to attract foreign direct investment (FDI) inthe retail sector. The approval of Government for 51% FDI in multi-brandretailers and increasing the limit of foreign direct investment to 100% in the retailstores of a single brand is a sign of boost for increasing the market size ofretail and attracting Global retailers. We can see that global retailers suchas Walmart, GAP, Tesco and JC Penney are increasing their purchases from Indiaand are moving from third-party purchasing offices to establish theirfully-managed and fully managed purchasing and purchasing offices. The retail sector consists of manyvarious segments out of which some important ones are Food and Grocery, Apparel,Jewellery, Consumer durables and IT, Furniture and Furnishing, Pharmacy andfootwear. The year 2017 was favourable for the herbal-ayurvedic brand and hencein upcoming years there are prospects for increase in the growing herbalsegment. Key Drivers of Indian Retail Industry’sGrowth are:· Large working populations· More of nuclearfamilies· Double Incomefamilies· Luxury spending· Easy customercredit· BrandConsciousness· Lifestyle changesand consumer behaviour· Liberations inFDI policies· IncreasingUrbanization· Reasonable realestate prices The retail industry can be classifiedinto two categories: Organized Retail