ASSOCHAM

FINANCIAL

PULSE
“Prospects in Indian Retail Sector”

December 2009

Prepared by:
ASSOCHAM RESEARCH BUREAU
Retail sector income to grow more than 30 per cent by the end of the fiscal:
ASSOCHAM

Indian retail market, ranked as the most attractive emerging market for
investment in the retail sector and the fifth largest retail destination globally, is
likely to regain strength with income of major retail players expected to grow
consistently to average more than 30 per cent by the end of current fiscal,
according to an Assocham Financial Pulse Study.

The Assocham Financial Pulse (AFP) Study titled “Prospects in Indian Retail
Sector” estimated that; in the second quarter of FY 2009-10, income of the retail
sector grew up by 7.2 per cent over the corresponding period of last year
whereas according to last five years performance of the retail sector, the retail
sector income would grow up by 22.7 per cent and 30.25 per cent in the third and
fourth quarter of the financial year 2009-10.

The Study noted that the share of retail trade in the country's gross domestic
product (GDP) was between 8–10 per cent in 2007. With strides of development
in the organized retail segment, its share has risen to 12 per cent presently.

As per the Study findings, the overall size of Indian retail sector has been
estimated to grow by USD 55 billion in 2010, at a compound annual growth rate
(CAGR) of 5.5 per cent, to become USD 410 billion market by 2010. Also,
organized retail, which currently accounts for nearly 5 per cent of the retail
market, is pegged at around USD 9.23 billion and expected to grow at a CAGR of
2.3 per cent to touch USD 13 billion by 2010.
“India has one of the largest numbers of retail outlets in the world. The sector is
witnessing exponential growth with retail developments taking place not only in
major cities and metros but even in tier-II and tier-III cities in India” said Dr.
Swati Piramal, President of Assocham.

According to Assocham estimates, over 100 malls of over 30 million square feet
of new shopping centre space are projected to open in India between 2009 and
end-2010.

As the competition gets tougher with new companies entering the Indian retail
landscape, existing players have also looked into their expansion activities
seriously with plans of opening up new stores.

Expansion Plans of the Major Retail Players in India

Number of Stores
Companies Time Span
Present Scenario Future Prospects
By end
Pantaloon Retail
1000 stores in 71 cities 25-30 stores FY 2009-10
India Ltd

Shoppers' Stop 27 stores 15 stores 3 years

Spencer’s 250 stores in 50 cities N/A 2009-10
Infiniti Retail
32 stores 100 stores 3 years
(Croma)
Reliance Retail 1000 stores in 86 cities N/A N/A
Vishal Retail 171 stores 100 cities 40 stores By 2010
EasyDay 25 stores 75 to 100 stores 3 years
Marks & Spencer 15 stores 10 stores 5 years
DLF Not Existing 500 stores 5 years
14 stand-alone stores and
Tommy Hilfiger 50 stores N/A
16 shop-in-shop stores
Source: Assocham Research Bureau
Among the major developments in the retail sector, DLF Limited, the big name in
Indian real estate business has cleared its intentions to come up in retail segment
with 500 luxury lifestyle stores through out India within 5 years while Tata Sons
are expanding their business activities with 100 new Croma stores under their
retail head Infiniti retail with in 3 years.

Creative Portico is now planning to set up 50 exclusive Tommy Hilfiger outlets

of premium home furnishings brand in India whereas Mark & Spencer, which is
presently operating 15 stores in India, is expected to open 10 new stores in less
than 5 years.

In the next phase of retail revolution in India, the companies are going to woo
the rural segment as the hinterland has witnessed an upsurge in economic
development over the past few years hence maximum growth is expected to
come from rural markets. During the last decade, the per capita income has
grown up by 50 per cent in rural India, mainly on account of rise in agri-
commodity prices and improved productivity, concluded the Assocham Study.