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Market size and penetration

PricewaterhouseCoopers estimates that the Indian retail sector is worth USD 350 billion and is growing at 15 to 20 percent per annum. Organised retail penetration accounts for between 5 to 8 percent. The unorganised market comprises 12 million mom-and-pop stores, also called ‘kiranas’.

The retail and wholesale sector in India accounts for approximately 14 percent of GDP and over a quarter of the value added in all services sectors. In terms of employment, the sector is the second largest employer (after agriculture) providing over 10 percent of all formal jobs in India. Strong demand and supply features are responsible for growing the retail sector. These include -

Selected demand drivers

  • Demanding consumers who want access to the latest and best products

  • Increased access to credit

  • New customer segments e.g., children, men, working women, etc.) clamoring for products catering to their needs

  • Increasing incomes are driving the purchase of both essential and non-essential products

Selected supply drivers

  • Growth of modern trade formats are making it easier for consumers to access established and new products/brands

  • New entrants are launching a range of products and services for consumers

  • Modern trade participants have long-term expansion plans for the Indian market

  • Growth of niche areas such as health and wellness, organic products, skincare, etc.

India’s retail penetration— growth opportunities in most categories

Indian retail sector—quick

Unorganised

12 million

retail market

kiranas

Growth rate

15 – 20%

Estimated

USD 412 billion

investment by

2011

Retail density

6%

facts Market size Organised retail

penetration

USD 350 billion 5–8%

Strategic Issues for Retail CEOs* : Perspectives on Operating in India’s Retail Sector

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