Essay

India's retail sector is wearing new clothes and with a three-year compounded annual growth rate of 46.64 per cent, retail is the fastest growing sector in the Indian economy. Traditional markets are making way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western-style malls have begun appearing in metros and second-rung cities alike, introducing the Indian consumer to an unparalleled shopping experience.

Retail sector: on an upward curve

India's vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. While organised retail in India is only two per cent of the total US$ 215 billion retail industry, it is expected to grow 25 per cent annually, driven by changing lifestyles, strong income growth and favourable demographic patterns.

KSA-Technopak, a retail consulting and research agency, predicts that by 2010, organised retailing in India will cross the US$ 21.5-billion mark from the current size of US$ 7.5 billion.

Retail space: up for grabs

By 2007, an estimated 50 million square feet of quality retail space will be available across India. This is in sharp contrast to the situation a decade ago. Then, there was not one shopping mall in India. Today, in Delhi, Mumbai and their suburbs, there are about 100 malls. Of the 700 new malls coming up all over India, 40 per cent are concentrated in the smaller cities. Organised retailing in small-town India is growing at a staggering 50-60 per cent a year compared to 35-40 per cent in the large cities.

A push for branded retail

India's branded retail sector, estimated at about US$ 6 billion, makes up only three per cent of the total market, but is forecast to grow at 25-30 per cent a year over the next four years, with plush department