Mumbai:
According to a study conducted by CRISIL Research and
Information Services, the organised retail industry
in India is expected to grow 25-30 per cent annually
and would triple in size from Rs35,000 crore in 2004-05
to Rs109,000 crore ($24 billion) by 2010. However CRISIL
has cautioned that organised retail sector will slow
down to single digit growth after five or six years
unless the industry brings in an innovative ''India
specific'' approach through expansion of the network.
Narasimham, head of research at CRIS INFAC said for
organised retail to grow to such proportions an investment
of approximately Rs3,100 crore per year was required
in the country. He said the food and grocery were the
fastest-growing segments in the country, with revenues
expected to grow by five times over the next five years.
The slow down in sales' volume after five years would
result mainly from saturation of demand in major metros,
currently witnessing an annual growth rate of 25-30
per cent due to surplus income of the young generation.
Ajay
Dwivedi CEO CRIS said metros and mini-metros offer maximum
scope for growth with six times more in sales volume,
as compared to tier-II cities, he said. Hence, it is
not necessary to expand the hypermarket super mall to
mini-metros and tier-II cities in the immediate future,
he said.
Narsimhan
said FDI in retail was necessary to sustain the investment-linked
growth but felt that the approval of FDI from the authorities
would come by the end of 2006 as in the meantime this
would allow domestic players to improve their position
in terms of business expansion and financial growth,
he said.
Though
food and grocery stores account for the largest share
of retail spent by the consumer at about 76 per cent,
and nearly 99 per cent of this market is in the unorganised
sector. But according to him this may change in the
next few years as it is estimated that food and grocery
revenue in the organised retailing market would multiply
five times, taking the organised shares of the market
to 30 per cent.
According
to Narsimhan all the current players in the organised
industry account for a mere 10 per cent of its total
potential.
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