The India consumption story is best reflected in the retail sector's growth in India. Gayathri Udyawar finds out what is shaping the retail sector in India and what investors can expect from the sector.
Indian retail sector is poised for a major upheaval. Be it e-commerce or brick-and-mortar model, every investor, no matter what their pocket size, wants to have a piece of this pie. Our country will become the third-largest consumer economy by 2025. With this strong consumption story and the fact that more than 92 per cent of the retail market in India is unorganised, it is only a matter of time for the retail sector to take off exponentially. Fuelled by this, the Indian retail market, which was at US$672 million in 2017, is expected to cross US$ 1.3 trillion by 2020, while the e-commerce sales are forecasted to touch US$ 120 billion by 2020.
Modern retail, as it called, has a short and happening history in India. We had some supermarket chains such as Subhiksha, which proved to be short-lived, and some badly-bruised ones like Vishal Megamart, but the organised retail market is very much blooming. The organised retail industry consists of big-box retailers, who have large format physical stores or supermarkets spread out in an area of 10,000 to 50,000 square feet. The basic idea of such enterprises is to provide a one-stop shop for all essential household needs. The big-box retailers generally operate in two segments, grocery and apparel, and can be largely classified as apparel and non-apparel retailers. Most of these retailers stock food, grocery, household and personal care, apparel, electronics, furniture and jewellery items, all under one roof. These include supermarkets such as Future Retail’s Big Bazaar and D-Mart. Then, there are others that focus on a particular segment and are called speciality retailers, including Aditya Birla’s Pantaloon and Trent.
This story is from the September 17, 2018 edition of Dalal Street Investment Journal.
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This story is from the September 17, 2018 edition of Dalal Street Investment Journal.
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