Modern retail: industry Overview
The growing middle classes - 70 million consumers are projected to become middle class over the next five years - are now demanding a better lifestyle and they have the money to pay for it...Challenges faced | Quirky factsUpdated: Mar 17, 2008 16:10 IST
The huge growth of the Indian economy means that more people have more money to spend and the retail industry - with thousands of exciting and diverse job opportunities - is reaping the rewards.
Across India, the top 50 retailers will invest US$35 billion in modern retail in the next six years and Mumbai has emerged as the country's retail capital. Everywhere you look, malls, supermarkets, hypermarkets, convenience stores and gourmet food stores have sprung up and jobs have followed.
The growing middle classes - 70 million consumers are projected to become middle class over the next five years - are now demanding a better lifestyle and they have the money to pay for it.
Arvind Singhal, chairman of management consultants, Technopak Advisors, says that Mumbai has been the epicentre because the retail explosion here has had a domino effect.
The Major corporate houses that have diversified into retail, such as Tata Group, Godrej, Aditya Birla, K Rajeha Group and the Future Group, are all headquartered here. Moreover, the early entrants into the sector such as Shoppers Stop, Pantaloon, Crossword and Globus started here. Other trailblazing formats such as Hypercity, Croma and Nature's Basket - which originated here - are about to be rolled out across the country.
HyperCITY plans to open up 68 new hypermarkets in the next five years and increase its staff sixfold by the end of the year.
The Tata Group's retail arm, Infiniti, will open 100 Croma stores by 2010 and hire 2,000 new employees from April.
The Future Group, which owns Big Bazaar and Pantaloon, will increase its staff fivefold to 125,000 by 2010.
They are all anticipating major growth in revenues too. Hypercity already has revenues of Rs1.8bn rupees. By December it anticipates a turnover of Rs 6.6 billion. The Future Group anticipates revenues of Rs 7,500 crore this financial year. By 2010, this will more than triple to reach Rs 25,000 crore.
One of the major challenges to the industry is the lack of skilled professionals and manpower. Rupesh Basu, business head, Hypercity, said: "I think there will be a movement of people from call centres into the retail industry. The challenge is to create loyalty in staff and rather than them leaving to work in other industries we want them to make retail a career of choice."