Domestic private sector is rushing to announce retail plans
Even as the government continues to delay the decision to allow FDI in multi-product retail chains, the fast-emerging Indian retail sector is becoming widely recognized among domestic entrepreneurs and investors as one of the biggest opportunities in India. Apart from existing players (such as Pantaloon) ramping up their retail chain store operations, many large business groups, including Reliance Industries, Birla Group and Bharti Enterprises, have announced their intention to cumulatively invest over US$10 billion over the next five years to capture a share in the fast-growing pie of the organized retail sector. In addition, various foreign players like Walmart and Tesco have announced their intention to enter the domestic market via a joint venture with a domestic Indian player. Major consumer spending items currently form part of the addressable market for the retail chain stores format and include food and grocery, general merchandise (such as furniture and furnishings) and apparels. While growth estimates for the organized retail sector vary, forecasts by our consumer analyst, Hozefa Topiwalla, indicate that India’s organized retail market is likely to grow from the current US$4 billion (2.1% of total relevant consumer spending) to US$ 64 billion (10.8%) by F2015.
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