The document discusses emerging trends in the Indian retail sector. Key trends include a focus on private label brands that offer higher value through lower prices. Retailers are also increasingly opening "shop in shops" by setting up sections within larger stores rather than owning their own stores, to reduce capital investment needs. Stores that were not financially viable have seen closures as retailers expand. Revenue share agreements between retailers and developers are becoming more common, providing a win-win structure. The retail sector is projected to grow faster than GDP as prosperity, disposable incomes, and a large young population fuel fundamental changes in the Indian economy and lifestyle.
1. ABSTRACT<br />Emerging trends in retailing<br />India has witnessed a frenetic pace of retail development over the past five years. Goldman Sachs has estimated that the Indian Economic growth could actually exceed that of China by 2015. It is believed that the Country has potential to deliver the faster growth over the next 50 years. As we all know that India has been a nation of Dukandars, having – approximately 12 million retailers. Obviously retailing is in our blood.<br />It is not just the global players like Wal-Mart, Tesco and Metro group who are eying to capture a pie of this galloping market but also the domestic corporate behemoths like Reliance, NeelKamal, KK Modi, Aditya Birla group, and Bharti group too are at the same stage of retail development.<br />Retail is India’s largest industry, accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behaviour, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centres, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof. The emerging trends in the Indian organized retail sector would help the economic growth in India. There is a fantastic rise in the Indian organized retail sector in a very short period of time. Eventually, out of the shadows of the unorganized retail sector, India has a chance of tremendous economic growth, both in India and abroad.<br />The growth of the Indian organized retail sector is anticipated to be heavier than the growth of the gross domestic product. Alterations in people's lifestyle, growth in income levels, and encouraging conventions of demography are proving favorable for the new emerging trends in the Indian organized retail sector. The success of this retail sector would also lie in the degree of penetration into the lower income strata to tap the possible customers in the lowest levels of society. The demands of the buyers would also be enhanced by more access to credit facilities. Retailers have a continuous challenge ahead to keep abreast of the emerging trends in retailing. Previously trends were longer term but there is now a definitive shift, trends are shorter periods of time and retailers will need to challenge themselves to meet the changes in consumer demand. Seven key emerging trends impacted by technology, culture, economy, ageing population and generational differences are evolving currently. Consumers are impacting these changes on retailers as a result of these effects.<br />Key Emerging Trends in Indian Retail Sector:Focus on private labels: Companies are looking to focus on increasing their private label sales. They are similar in quality compared to branded products but offer higher value as they are 15-20% cheaper than national brands. Industry players are looking to increase the sales mix of private labels brands.Move towards shop in shops:Retailers are increasingly looking to open shop in shops rather than own stores given the paucity of capital in the sector. Typically a store of the size of 10,000sqft requires investment to the tune of Rs22.5mn. Instead of making this high capital investment, Retailers are increasingly looking to set up shop in shops where they can retail their products in larger department stores or multi-brand outlets with zero upfront investment.Closure of unviable stores:There have been huge closures of stores over the last year as retailers embarked on huge expansion plans without proper research on catchments and viability. However, going forward we expect Retailers to be more circumspect before launching new stores<br />Revenue share agreements with developers:The move towards revenue share would be a win-win situation for both retailers and developers. In a typical revenue share agreement, there is a minimum fixed rental agreement which is at a discount to what is normally charged (around 10 to 30%) and there is also a variable component which is a percentage of total revenues earned by the store. Overall, rentals work out to 5-6% of revenues for Hypermarkets, but could be up to 30% of revenues for designer stores.<br />Projections about the Indian retailing:<br />1) Growing Prosperity: <br />2) Increase in the Sizable Disposable Income<br />3) Place is no more important<br />4) Increasing Potential in Rural Markets<br />5) Large working Young Population<br />6) Fundamental Changes in Indian Economy<br />Submitted by:<br />Sonal Agrawal<br />Assistant Professor<br />Dept of Commerce<br />Hislop College<br />Nagpur<br />