They say – India, with a population of about 1.2 Bn is the most desirable retail market in the world! Now that’s one thing Indian Business houses can be proud of! Along with the demographic advantage, this stature is provided by a strong economic growth of the nation. Estimated at US $ 450 Billion, the Indian retail sector has seen tremendous growth over the years.
It can only get bigger from here. There are some reasons favouring this :
- Huge Population with rising per capita incomes
- Influx of organized retailers – currently at about 15% and increasing
- GDP growth
Now these were more from an economy side – there are some reasons from the consumer side as well:
- There were times when you used to go out and shop only for those essential items – well times have changed now. Consumers love shopping- especially the women folk, and step out for those luxury products as well!
- A large number of me-too consumers have thronged. My neighbour buys something- so must I! My friends buy the latest gadgets – why shouldn’t I? This mind set has been contributing in a big way to the retail growth story
- Consumers look forward to value in products and are also willing to shell out for it- something which retailers capitalise on
How about looking at this from the business side as well! Even business house have taken a lot of steps to ensure business goes on and goes up in fact!
- The increase in competition has brought about more value driven offerings in the market. This has contributed to the increase in sales as consumers look forward to value purchases.
- Business houses have taken great steps in bringing out efficiencies in the supply chain- enabling business houses to become more competitive.
- Business houses have followed the changing trends in consumer needs and brought out a variety of offerings accordingly. No wonder the top purchases include Two- wheelers, cosmetic products, hair care products, apparel and mobile phones!
- Retailers have rushed to the rural sectors over the years and have seen tremendous growth over the years
Well these were some of the key reasons from three different angles on why the Indian retail sector is a success. My next article will focus on what will be the key focus areas in this industry for the next 10-15 years!