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Kamal Nath releases India Retail Report 2007; launches indiaretailing.com

MUMBAI: Commerce and Industry Minister Kamal Nath while releasing the Images India Retail Report 2007 said that organised retail in India has the potential to add over Rs 2000 billion business by the Year 2010 generating employment for some 2.5 million people in various retail operations and over 10 million additional workforce in retail support activities including contract production and processing, supply chain and logistics, retail real estate development and management.

 

"After leading the IT bandwagon, India is poised to grow as a Retail hub. It is imperative to sustain the modernisation of the retail sector and dispel the myth that the game is big Vs small or traditional Vs modern or organised Vs unorganised or local Vs foreign. What is needed is to create an appropriate environment to propel retail where all benefit," he added.

Talking about the key challenge areas for the retail growth Nath expressed concern over escalating real estate cost, scarcity of skilled workforce and structured supply of merchandise which he assured would be tacked in co-operation with the retail industry and the support organisations.

Revealing key figures from the India Retail Report 2007 of India Retail Forum chief convenor Amitabh Taneja said that the organised sector accounted for Rs. 55,0000 million business at current prices in the calendar year 2006 increasing its share to 4.6 per cent of the total Indian Retail Value that stood at Rs. 12,00,0000 million. Moving forward, organised retailing is projected to grow at the rate of about 37 per cent in 2007 and 42 per cent in 2008.

"Going by the current growth trend and considering the fact that existing prominent players in organised retail have stepped up their expansion drive with Reliance announcing big plans and other Indian corporate houses too evincing keenness on investing heavily in this sector as also the inking of the joint-venture between the world’s largest retailer Wal-Mart and Bharti – The organised retail in India has indeed gained top speed and is now on the verge of take-off," Taneja added.

According to Images India Retail Report 2007, of the Rs.12,00,0000 million retail market, food and grocery retail is by far the single largest block estimated to be worth a whopping Rs.7,43,9000 million, but more than 99 per cent of this market is dominated by the neighbourhood kirana stores.

Talking about the global perception about India, about its economic might and potential in terms of market size Nath said that there had been a drastic change over the last few years. While the buoyant manufacturing and services sectors had contributed in fuelling consumption demand in urban as well as rural areas, the government on its part remained committed to improving infrastructure and providing a congenial environment for indigenous business modules to blossom and harness domestic as well as foreign investment to optimum levels.

 

"But unlike the experiences in most other countries, growth of Indian retail is not going to be a staggered and time-taking process: India has already shown the world how quick it can adapt to hi-tech products and services and will again set a record of sorts in setting up world class retail formats across the country in record time. In the next five years India should have retail entities strong enough to compete with the best in the world," added Nath.

At present, he said, India's retail sector is largely unorganised, with about 15 million tiny outlets catering to consumer needs across the country – it employs the second-largest number of people after agriculture. Organised retail is now focused primarily on the 300 million urban 'middle classes' and an additional 200 million rural rich, who form a consumer market worth more than US$100 billion. So, there is enough ground for the modern and the traditional formats to co-exist.

Narrating India’s economic growth story Nath highlighted three important things:

- That here is a society in which the fruits of development are more evenly spread, in which democracy is more real and palpable to the mass of the population, which makes for a stable social environment that is attractive and reassuring.

-That India is an enormous market, of which you are seeing only the tip of the iceberg.

- The tremendous resilience of India: we survived the zooming oil prices, the fluctuating dollar and global recession, with barely a hiccup.

The Indian economy is integrating with the world, and yet it simultaneously has its own dynamics, which cushion global shocks as in no other country.

"India Retail Report 2007 will set benchmark figures on consumer spend, retail market size across key categories and segments with scope and also performance of key players and their expansion plans," further added Nath.

In his address Ministry of Commerce and Industry department of industrial policy and promotion secretary Dr. Ajay K Dua said, "The growth of the Indian economy is now manifesting itself in the growing purchasing power of its citizens. A 10 to 12 per cent increase in the economy’s disposable income and a much higher one in urban areas is also reflecting itself in the way goods and services are bought and sold."

"There would be a real revolution in the Indian retail industry, if the changes being witnessed in the metropolitan and other tier-one towns percolates to all the 784 urban settlements, with populations above 50,000 persons. This is likely to happen as the real estate prices in the large metropolitan towns are increasingly becoming prohibitive and consequently giving distinct advantage to those who are already in the business of retailing, viz., the traditional mom and pop stores.

Rural and semi-urban incomes are also expected to grow much faster in future, once the agriculture growth rate pushes up. Our civic laws concerning construction and property development also need to be re-looked, as the earlier convenience-stores get replaced by shopping malls and other formats of organised retail trade," he added.

Expressing concern over the consumption and mall development trend, editorial director of the research of India retail research R S Roy called upon the entire retail fraternity, concerned Govt. departments and the supporting organisations to work towards giving Indian retail - a face of India.

"India Brand Story can travel across the globe with Delhi Hat type shopping cum entertainment centres opening not only across India but all over the world. Public private partnership can revitalise the formats like Khadi Bhawans that runs one of the largest retail networks in the world, and also govt. state run emporia," he said.

As India emerges as one of the most potential markets for global brands and retailers and retail reinvents the way modern Indians celebrate their spending power, India that takes pride in its rich culture, heritage, art, craft and variety of wares must capitalize on this ever escalating consumerism and channelise the spending towards healthy consumption for overall development of the country.

Initiated by India Retail Forum and Images FandR Research, some of the world’s top global research and consulting firms like AT Kearney, Ernst and Young, PWC, Technopak, KPMG, ICICI, AC Nielsen-ORG Marg, Synovate, Cushman and Wakefield etc. contributed for the India Retail Report 2007 research.

The occasion also saw the launch of a retail information interface portal Indiaretailing.com by Kamal Nath.

Indiaretailing.com head Pallav Moitra said, "Indiaretailing.com has an ambitious philosophy personified by these words: The home page of the Indian retailing i industry Indiaretailing.com is being designed to be just that – with a 24/7 update and news feed team that gets you the retail intelligence that affects your business in every way."

"In the evolution of Indian retail in-time information will be vital to keep the industry and all its stakeholders abreast of the developments across. This portal is also aimed at the retailing community around the globe, giving a wide angle view and analysis of the business of Retail in India. Alongside interactive features such as interviews, chats and business development tools, it will also contain exclusive and investigative editorial content that we can promise, no other media has access to," he added.

The portal is expected to have around 200000 page views in the very first month of operation and is strongly geared up to enjoy a very high and filtered subscriber number. To begin with the subscription number for daily News Letters is expected to reach over 25000 key people in the retail industry.

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