{"id":27067,"date":"2017-06-28T02:44:19","date_gmt":"2017-06-28T09:44:19","guid":{"rendered":"https:\/\/www.denimsandjeans.com\/?p=27067"},"modified":"2017-06-30T02:59:51","modified_gmt":"2017-06-30T09:59:51","slug":"indian-retail-market-heats-usd-1-trillion-2020","status":"publish","type":"post","link":"https:\/\/www.denimsandjeans.com\/recovery\/latest-denim-reports\/indian-retail-market-heats-usd-1-trillion-2020\/27067","title":{"rendered":"Indian Retail Market Heats Up : USD 1 Trillion By 2020"},"content":{"rendered":"

India, the second largest market and 3rd biggest economy in the world is again attracting the International Retailers as the taxation and ease of doing business are becoming more favorable for the foreign investors.\u00c2\u00a0 In 2016, the Indian retail market stood at a whopping USD 641 billion<\/b>. With a compounded annual growth rate of 10 percent, an India Business of Fashion 2017 report estimate that by 2026 the retail market in India will be worth USD 1.6 trillion<\/b>. Retail trade has already been acknowledged as the country\u00e2\u20ac\u2122s largest service sector employer. During this year\u00e2\u20ac\u2122s budget, the government threw a surprise by declaring 100% FDI in multi-brand processed food retailing. Thus sending a positive sign for global retailers to set up shop in the country. In FY16 32 foreign fashion retailers set up online shops in India, while 22 chose the brick-and-mortar route. It is worth noting that as many as 44% of the foreign fashion online retailers were from the UK. Also, most of the brands which opted to set up stores chose Mumbai and Delhi as their preferred geographies.<\/p>\n

What seems to be a positive indication for the Indian market, more than 50 global<\/b> retailing chains are set to open approximately 3,000 stores<\/b> in India in the next six months, reports The Economic Times.The report cites a data report compiled by Franchise India that has tied up with these 50-plus retailers including 26 Apparel and Lifestyle brands , to help them launch the stores in small and untapped markets in the country. Some of the brands that customers will be able to avail include Korres, Migato, Evisu, Wallstreet English, Pasta Mania, Lush Addiction, Melting Pot, Yogurt Lab and Monnalisa.<\/strong> Some US and Singapore brands will also be a part of the retail chains planning to open stores in the country. The retailers are expected to pump in big investments to open 3,000 stores, in the backdrop of India\u00e2\u20ac\u2122s expanding economy and improved ease of doing business.<\/p>\n

\"Indian<\/a><\/p>\n

This influx of brands wanting to start businesses in India is due to India\u00e2\u20ac\u2122s retail market dominance, propelling India to become the \u00e2\u20ac\u0153most promising retail market in the world\u00e2\u20ac\u009d, as per an AT Kearney report. There has been an increasing trend of native retailers failing in their own country, forcing them to explore other beaming markets like the one flourishing in India. The trend of foreign brands opening establishments in India is also due to the government\u00e2\u20ac\u2122s directive, allowing 100 per cent foreign ownership in business-to-business (B2B) eCommerce organisations<\/p>\n

International brands including Zara, H&M, Mango, Guess, GAP <\/b>etc. have made deep inroads in the Indian apparel market. Indian consumers increasingly prefer these brands for their perceived quality, fit and style. Sourcing from India, Bangladesh , Turkey and some other countries , they make an offering which makes it dificult for Indian brands to emulate. On the contrary, Indian brands, such as Fab India, W, BIBA, AND, Allen Solly, Van Heusen etc., which have been quite successful in the domestic market have failed to replicate a similar fan following in the global arena. However, as the size of these brands increase, we can probably see some of them taking international forays . As the image below explains, H&M has already achieved a turnover of USD 75 million in their first year and turned profitable from only 12 stores. They expect to open another 50 stores in next 2 years. \u00c2\u00a0Zara is at about USD 140 million , M&S at about USd 120 million and seem to be changing strategies to achieve a better growth like H&M.<\/p>\n

\"Indian<\/a><\/p>\n

Below are some encouraging figures coming from Indian Retail Industry:<\/span><\/h3>\n
    \n
  1. \n
    India has occupied a remarkable position in global retail rankings; the country has high market potential, low economic risk, and moderate political risk .<\/div>\n<\/li>\n
  2. \n
    India\u00e2\u20ac\u2122s net retail sales are quite significant among emerging and developed nations; the country is ranked third (after China and Brazil) .<\/div>\n<\/li>\n
  3. \n
    Overall, given its high growth potential, India compares favorably with global peers among foreign investors .<\/div>\n<\/li>\n
  4. \n
    With investment of around US$ 511.76 billion, the first half of 2016 witnessed the highest annual private equity (PE) in the retail sector, since 2008.<\/div>\n<\/li>\n
  5. \n
    By 2020, food & grocery segment is expected to account for 66 per cent of the total revenues in the retail sector, followed by apparel segment .<\/div>\n<\/li>\n
  6. \n
    Demand for Western outfits & readymade garments has been growing at 40\u00e2\u20ac\u201c45 per cent annually.<\/div>\n<\/li>\n<\/ol>\n

    The Indian retail industry has emerged as one of the most dynamic and fast-paced industries due to the entry of several new players. It accounts for over 10 per cent of the country\u00e2\u20ac\u2122s Gross Domestic Product (GDP) and around 8 per cent of the employment. India is the world\u00e2\u20ac\u2122s fifth-largest global destination in the retail space.<\/p>\n

    \"Indian<\/a><\/p>\n

    E-Commerce<\/span><\/h2>\n

    India is expected to become the world\u00e2\u20ac\u2122s fastest growing e-commerce market, driven by robust investment in the sector and rapid increase in the number of internet users. Various agencies have high expectations about growth of Indian e-commerce markets. Indian e-commerce sales are expected to reach US$ 100 billion! by 2020 from US$ 30 billion in FY2016<\/strong>. Further, India’s e-commerce market is expected to reach US$ 220 billion<\/strong> in terms of gross merchandise value (GMV) and 530 million shoppers by 2025, led by faster speeds on reliable telecom networks, faster adoption of online services and better variety as well as convenience.<\/p>\n

    Apparel sales has been witnessing a great jump in the last 2 years with lot of mergers and acquisitions happening in the industry. The Bangalore based Myntra is expected to touch an annual turnover of USD 1.6 billion <\/a>in 2017-18<\/strong> surpassing all major brick and mortar retailers. It controls about 60% of online apparel retail market alongwith its subsidiary Jabong. Amazon is making quick investments<\/strong> to capture a larger pie of this market followed by Reliance Ajio<\/strong> which has been created last year to dive into this fast growing segment of online apparel retail.<\/p>\n

    Apparel Tie-ups And Investments<\/span><\/h2>\n

    With the rising need for consumer goods in different sectors including consumer electronics and home appliances, many companies have invested in the Indian retail space in the past few months.<\/p>\n