A study on development of Indian retailing industry current scenario and future perspective – The growth of new retail formats

The Indian retail sector has arrived at a very critical stage. Stores in modern formats have emerged in the metropolitan cities but the bulk of the retail sales happen through traditional retail formats. The development of modern retailing is of great interest to marketing scholars, practitioners and policy makers. This paper analyses the developments in retailing in India. A literature survey of retailing in India and some newly industrialized countries is carried out. Factors stimulating modernization are discussed and some implications for managerial action and policy are derived. FDI is a tool for economic growth through its strengthening of domestic capital, productivity and employment. The Indian retail sector is going through a transformation and this emerging market is witnessing a significant change in its growth and investment pattern. Both existing and new players are experimenting with new retail formats. Currently two popular formats -hypermarkets and supermarkets are growing very fast. Apart from the brick -mortar formats, brick -click and click-click formats are also increasingly visible on the Indian retail landscape. The retail business, in India, is estimated to grow at 13 per cent per annum from US$ 322 billion in 2006–07 to US$ 590 billion in 2011–12. The unorganized retail sector is expected to grow at about 10 per cent per annum from US$ 309 billion 2006–07 to US$ 496 billion in 2011–12. Organized retail which now constitutes a small four per cent of retail sector in 2006–07 is likely to grow at 45–50 per cent per annum and quadruple its share of total retail trade to 16 per cent by 2011–12. The study, which was based on the largest ever survey of all segments of the economy that could be affected by the entry of large corporates in the retail business.