Growth Phase of Indian Retail Sector to Continue

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The phase of high growth of Indian retail sector is expected to Continue due to huge amounts of investments and breaking up of traditional concepts in this sector. These are leading to various changes and are providing further boost to the growth of the Indian Retail Sector. The Indian Retail Sector that includes the traditional retail and the modern retail is estimated to grow at a very fast pace from US$ 336 billion, in 2006 to US$ 590 billion, by 2011.

The traditional retail sector is expected to increase from US$ 324 billion, in 2006 to US$ 493 billion, by 2011. The share of the modern retail in the Indian Retail Sector is also estimated to increase from 4% in 2008, to 16% in the next five years. This exceptional growth is expected to take place in the retail sector due to large amounts of investment which is estimated to be about US$ 35 billion in the next five years. The "cash- and- carry" activities are expected to receive the majority of investments.

The maximum amount of growth in the Indian Retail Sector will be registered in the topmost 50 to 60 markets that are located in the urban areas. These markets would be mostly supermarkets and hypermarkets. However, these supermarkets and hypermarkets will also witness fast erosions in their margins. Further, it is estimated that in the longer run, the convenient stores that are located in the local neighborhood will continue to survive.

A major focus area in the Indian retail sector is the supply chain management. In the western countries, the retail sector has a highly developed system of supply chain. However developments in supply chain in Indian retail sector has been quite slow.

Other areas that need attention for the growth of the Indian retail sector to continue includes duty and tax structures, infrastructure, rising land prices and effective trend forecasting. Trend forecasting needs to be done in the country especially in the segments of cosmetics, apparel and footwear for this will help the retail companies to curtail their expenses substantially. Also another area that requires attention is manpower for it is estimated that the Sector of Indian Retail will suffer from shortage of manpower by about a million people, by 2012.

The chains in the Indian retail sector need to frequently change their stocks and also adopt concepts like home delivery. If all these areas are given immediate attention then the growth phase of Indian retail sector would continue at a very fast pace. The Indian retail sector would then witness the setting up of retail parks that are flourishing in Europe. Further, the growth of the Indian retail sector would help in making the country ready for big retailers by 2015- 2016.