Santosh Pandey, Vice-President, Growel’s 101 Mall
We are into 2012 – the New Year with its fresh hopes and aspirations as also a fresh optimism for the economy. After a rather adventurous 2011, many are wondering how the retail sector would fare this year.
With controversies galore, retail has been one of the fastest growing segments in India over the last few of years.
In the last part of 2011, retail remained the most talked about sector after the government’s proposal to open up the sector to foreign investments. Stocks skyrocketed only to take a plunge after the government decided to put the FDI proposal on hold following opposition.
Despite all the ups and downs, the coming year will definitely bring in a boom for the sector that should grow by 15 to 20%. Some surveys forecast total retail sales to grow from Rs.20.26trn in 2011 to Rs.31.78trn by 2015. Strong economic growth, population expansion, increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth.
Because of the expanding middle and upper class consumer base, there will also be opportunities in India’s second and third-tier cities. The greater availability of personal credit and the growing number of vehicles also contribute to a trend of over 12% average annual retail sales growth.
Diversification that has been the norm in the sector for some time would definitely show in the coming year too. Brands are moving to cater to different genres and are adding in a lot more variety.
What’s more, retail space is growing and how. Cities including Mumbai, the NCR and Bangalore are expected to lead in terms of retail space development, with over 15 million sq ft space getting operational by 2012. Several constructions that were stuck because of the slowdown two years ago have been restarted.
For a sector that is growing so rapidly, the government’s proposal to bring in FDI would have worked. When it does finally come along, it would only be beneficial to the customer bringing in competitive prices, improvement in the quality, increase in employment opportunities and better investment on returns for developers.
And then even as we talk about retail growing in this year, there is no dearth of competition — e commerce being one of the biggest competitors. That is one field that is growing even faster with enormous business being done on the Internet day in and day out. The retail sector needs to pull up its sleeves because online products sell like hot cakes offering much more convenience and privacy.
All said though, 2012 definitely seems to be a bright year for the retail sector in India. A country with such a wide spread demography — population, languages, religions, festivals, celebrations undoubtedly offers all the opportunity and prospects for a healthy and bullish year.
