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Organised retail set to touch $30 bn in 3 years: Study

Organised retail is set to grow by leaps and bounds in India, from $14 bn now to $30 bn in three years, reports Gaurav Choudhury.

business Updated: Dec 11, 2007 02:35 IST
Gaurav Choudhury

Organised retail is set to grow by leaps and bounds in India, from $14 billion now to $30 billion in three years. The sector would account for 30 per cent of a market of $280 billion in the next 10 years, said a report, Winning with Intelligent Supply Chains, brought out by the Federation of Indian Commerce and Industry (FICCI) and Ernst & Young.

“The low penetration levels of organised retail in India and the fact that the market size is set to grow at a frenetic pace provide a huge potential for retailers to tap a highly unexplored market,” the report said.

The report states that the high growth achieved by the economy in recent years, a youthful population having a large propensity to consume and the easy availability of credit at low interest rates have been the key drivers of organised retail.

Yet there are challenges that the sector faces, which need to be addressed forthwith. The challenges include inadequacies in infrastructure such as lack of high-quality road networks, power shortages and insufficient storage spaces, multiple state and central taxes and a shortage of skilled manpower, said Rajan Bharti Mittal, MD, Bharti Enterprises.

FICCI secretary-general Amit Mitra said that “there is need to reduce wastage and enhance infrastructure of the country”.

“There is a need to incentivise investments in supply-chain infrastructure. Cold-chain infrastructure should be granted tax holidays and there is a need for rationalising the taxation structure by removing octroi, entry tax and various inter-state levies,” Mitra said.

Pawan Jain, CMD, Safexpress, said that retail has taken a new turn, where shopping malls and different retail chains were working to meet the demands of the customers without any delays, while maintaining profits. “Intelligent supply chains would have to create a pan-India market for retail. That really is the test,” Jain said.