Sunday, January 21, 2007

The reality of retail in India

Rediff Money reports that even though everyone is going crazy about the retail boom in India, just as there are several Indias, there are also several sides to the retail boom. While specific segments such as the value and discount retail are thriving, other segments such as middle to high end retail are not doing so well. Walk into any mall during the week and you will see stores with barely any customers at all, while stores such as Big Bazaar are busy at all times of the day.
This is the paradox that is India. While real estate developers have been going crazy setting up malls, there aren’t enough takers as yet, and definitely not enough buyers. A great shake-out awaits the Indian retail industry. According to Deepankkar Sanwalka, KPMG’s executive director, "If the spending power of consumers is high in a locality, it could sustain two-to-three large players."

Organized retail only accounts for 3% of the total retail industry as yet and is estimated to grow to $64 billion by the year 2015. As a result, the retailing space in the country will also rise by 15-20% by 2010.

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