The last two decades have seen a global trend towards outsourcing. India has been the beneficiary of this trend because of its large youth population.
Outsourcing of work to India has meant that not only do the youth have jobs but they have lucrative jobs as well.
Wealth generated from outsourcing has played a significant part in the fuelling of the spectacular rise of the world’s largest and fastest growing middle classes in history, which in turn has sparked off the retail revolution.
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At $330 billion the India retail industry accounts for a sizeable portion of the country’s GDP, and is second only to agriculture as a source of employment. The Indian retail market is estimated to grow from US $330 billion to US$ 427 billion by 2010.
India has roughly about 12 million retail outlets, the largest in the world. Of these, nearly 5 million sell food and related products. Organized retail outlets account only for 4 percent of the total market and are estimated to rise to a record 22 percent by 2010. These are rocking times for retail in India.
Image Source: sunrisepos.com
The way the Indian market is poised right now, the sky seems the limit. India has topped the Global Retail Development for the third consecutive year. Its position as the world’s most attractive market seems unchallenged for now at least.
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The retail boom has meant that there are numerous new players moving into grab their piece of the action. The market still being nascent, there seems to be room for everyone. Suddenly the landscape has changed.
Everywhere one looks in the metros there is either a multi- specialty mart, or a hypermarket or a supermarket. This scenario is now being duplicated in other cities as well. The Indian people are witnessing a ‘never-before’ shopping frenzy. This boom has meant a remarkable change in shopping experiences.
The consumer is spoiled for choice. The new shopping experience provided by the malls has redefined the shopper’s expectations from shopping. It’s amazing, the freedom of choice that is available under just one roof. With retail ambiences getting upgraded to five star lobby standards it isn’t surprising that the customer now finds it cumbersome to visit the local grocery guy.
The Indian retail sector is led by Pantaloon, Shopper’s Stop, Westside, Wills Lifestyle, Titan, Raymond, Bata, Crosswords, Lifestyle, Globus, Barista, Cafe Coffee Day, Subhiksha and several others. There are several international players as well, the most well known being McDonald’s, Pizza Hut, Domino’s, KFC, Levis, Lee, Nike, Reebok.
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With the Indian GDP growing at 7-8 percent it truly looks like India is going to become the business destination of global retailers. A quantum leap for the retail sector is expected during the next decade. Despite how good the numbers look on paper the retail scenario seems to be struggling in some areas.
On one hand we have Big Bazaar recording awesome sales, growing at 100% year-on-year and on the other hand we have several shops in its proximity wearing a deserted look, making the, much talked about promise of retail boom seem almost like a dream. Malls have sprung around in gay abandon in anticipation of a consumption boom which may yet play truant. Some malls have had to close down due to lack of business.
In the end only the bigger players will survive. Many business houses are going into retail as I write this. While predictions are galore that this decade is going to witness enormous retail, there is an underlying fear that the recession that is hitting America will affect the economies of the world. That however is a matter of prediction. At least for now India continues to bask in retail glory.