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BMI India Retail Report.Q2 2009Published by: Business Monitor International Published: May. 14, 2009 - 48 Pages Table of Contents
AbstractThe new BMI India Retail report predicts that total retail sales will grow from less than US$300bn in 2007 to more than US$700bn by 2013. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth. As well as an ever-expanding middle- and upper-class consumer base, there will also be opportunities in India’s tier II and tier III cities. The greater availability of personal credit and a growing vehicle population that provides improved mobility also contribute to a trend towards 15% annual retail sales growth. India’s nominal Gross Domestic Product (GDP) was US$842bn in 2007. Average annual GDP growth of 7.6% is predicted by BMI to 2013. With population increasing from 1.16bn in 2007 to an estimated 1.26bn by 2013, GDP per capita is predicted to double by the end of the forecast period, reaching US$1,459. Our assumption of consumer spending per capita is for an increase from US$502 in 2007 to US$1,104 by 2013.The growth in the overall retail market will be driven, in large part, by the explosion in the organised retail market. By this, we mean the familiar Western concept of chain outlets, department stores, supermarkets, etc. According to Investment Commission of India (ICI) data, this segment in 2006 accounted for US$12.1bn of sales, or 4.6% of the total retail segment. BMI forecasts that organised retail sales will reach US$76.2bn by 2013, representing 10.7% of the total. The second factor is the success that local firms have had in developing the modern concept. Domestic retailers such as Reliance and Pantaloon will continue to invest heavily in growing their store networks and improving their in-store offerings. The impact they have had on growth will only be boosted further with the arrival of expansion-oriented multinationals. Mass grocery retail (MGR) sales in India are forecast to undergo explosive growth over the forecast period. BMI predicts that sales through modern retail outlets will increase by 443.2% to reach US$16.7bn in 2012. This phenomenal forecast is a consequence of India’s dramatic and rapid shift from independently-owned small-scale retail to large-scale modern outlets. However, it must also be noted that this growth is forecast to come from a very low starting point. Retail sales for the BMI universe of Asian countries in 2007 amounted to an estimated US$1,221bn. China and India alone in 2007 accounted for an estimated 92% of regional retail sales, with their combined share expected to reach almost 95% by 2013. Growth in regional retail sales for the period 2007 to 2013 is put by BMI at 181%, or an average 19.3% per annum. China should experience the most rapid rate of growth, followed by India and Indonesia. For India, the estimated 2007 market share of 18% is expected to fall to 15.3% by 2013 Get Full Details About This Report >> |
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