IBEF-印度零售业分析（12月）（英文）-2018.12-34页_1mb

Summary of Indian Retail Industry

Core Content

The Indian retail industry is one of the fastest-growing in the world, driven by economic growth, rising consumer demand, and evolving preferences. It is projected to grow significantly from US$ 672 billion in 2017 to US$ 1,200 billion by 2021 and further to US$ 1,750 billion by 2026. The modern retail market is also expected to double in size, reaching US$ 26.67 billion by 2019. The online retail sector has shown rapid growth, with revenue expected to reach US$ 60 billion by 2020.

Main Market Segments

• Traditional Retail: Dominates the market with an estimated 88% share in 2017.
• Organised Retail: Growing at a CAGR of 20-25%, projected to reach 18% of the market by 2021.
• E-commerce: Expected to reach 7% of the market by 2021, with revenue growing from US$ 17.8 billion in 2017 to US$ 32.70 billion in 2018 and further to US$ 60 billion by 2020.

Key Growth Drivers

• Economic Growth: Rising per capita GDP and increasing disposable incomes are boosting consumer spending.
• Urbanisation: Growing urban populations are driving demand for quality products.
• FDI Policy: India allows 51% FDI in multi-brand retail and 100% FDI in single-brand retail, with a minimum investment cap of US$ 100 million.
• GST Implementation: The Goods and Service Tax (GST) is simplifying the tax structure and improving cash flow.
• Consumer Finance: Increased use of credit and digital payments is enhancing the retail experience.
• M&A Activity: A number of acquisitions and collaborations have been observed, including Amazon acquiring More, Walmart acquiring Flipkart, and Reliance Retail acquiring several lifestyle brands.

Opportunities in the Indian Retail Sector

• Rural Markets: Significant growth potential due to rising consumption and urbanisation.
• Private Label Products: The share of private label in India is low compared to the US and UK, offering growth opportunities.
• Luxury Retail: Expected to grow to US$ 30 billion by the end of 2018, driven by exposure to international brands and higher purchasing power.
• E-commerce Expansion: India's online retail market is projected to grow at a rate of 31% YoY, with a forecast of US$ 60 billion by 2020.

Strategies Adopted by Retailers

• Strong Distribution and Logistics: Companies like Shoppers Stop use a "hub and spoke" model to improve efficiency.
• Expansion: Retailers are expanding both in urban and rural areas, with Xiaomi planning to open 5,000 stores by 2019.
• Omni-channel Retailing: Retailers are adopting multi-channel strategies to reach consumers through both physical and digital platforms.
• Value-added Services: Loyalty programs, happy hours, and contests are used to attract and retain customers.
• Collaborations and Partnerships: Retailers are forming partnerships with manufacturers, financial institutions, and service providers to enhance their offerings.
• Supply Chain Innovations: Advanced supply chain planning and logistics are crucial for maintaining profit margins and competitiveness.

Key Industry Organisations

• Retailers Association of India (RAI): Based in Mumbai, provides industry support and advocacy.
• The Franchising Association of India (FAI): Based in New Delhi, promotes franchising in the retail sector.

Useful Information

• FDI Policy: Allows 51% FDI in multi-brand retail and 100% in single-brand retail.
• GST Impact: Simplifies the tax structure, reduces cascading, and improves cash flow for distributors and retailers.
• Exchange Rates: Historical exchange rates (INR per US$) are provided for both fiscal and calendar years.

Conclusion

The Indian retail market is experiencing substantial growth, supported by strong economic fundamentals, evolving consumer behavior, and favorable FDI policies. The shift towards organised retail and e-commerce is expected to continue, with opportunities in rural markets, private label products, and luxury retail. Retailers are adopting innovative strategies and leveraging technology to enhance their competitive edge and meet consumer demands.