Retail Boom-Growth & Challenges

India being the second most populous country with over 1 billion population, the retail segment is bound to make a difference in the economy. However the Indian bourses is still predominated by the Infrastructre stocks, and partly by the Financial stocks & rest by the IT sector. It will not be long when we would find that the retail industry contributing a significant portion in the SENSEX, as in the US developed market economy. Indian retail industry is broadly divided into organised and unorganised sector.We need to pull on the unorganised sector more to reap the
benefits. This boom in the retail segment of the industry owes much to its young population.With a high growth in the economy, rise in the income level, there is an increase in the disposable income. This income has resulted into a higher propensity to consume.

The increase in the consumerism can be felt when we see a growing number of shopping malls across the cities of India. These malls provide the people with all comforts-being a one stop shop for all goods to easy credit facilities with low interest & less documentation. Previously people went to a market place with different shops scattered in different directions. You needed to specify what you want to buy. Now customers have everything lying in front of them, packaged in most hygenic means, marketed in the minds through exclusive media interfaces. So you
might have gone to buy one thing but have ended up buing more than few. These shopping malls have also been a great help to the working women. To maintain a balance between work and home, hard pressed with time, shopping out in the mall on a weekend helps to run the family with much ease. Kids also find the places attractive, with escalators to go up & down, play area & rhymes CD to hear around. So Life made easier for a particular class of people. Yes, with
urban spending of Rs 10, it increase the rural income by Rs 40. This urban-rural linkage will be made more strong in the coming years with an upward surge in the retail industry.The increase in the consumer spending can also be attributed to the attitudes of this young people. As the saying goes "we wear our attitudes"- it is found that to be updated, contemporary & a willingness to change has become the order of the day. These young people do not mind in having more than one of the same gadgets. This is because they want to be updated, they want to be different & they have more choices in Life. This effect can be best described by the Mobile Handset Industry.This industry has been offering now and then with handsets targeted to different segments of its everincreasing customer base. With few changes, an updated version,added features and a multilayered promotional activities is bound to make a hit. This generation of today never minds to buy another one although the existing handset is doing good.So we are not surprised when we see there is a 50 percent plus growth in the gadget
market.

According to data from Economic Times investment in this retail sector is to be around $365 million in 2008. It is said that big players like Reliance, Aditya Birls Group, DLF and Spencer is expected to invest in Retail Business in 2008 an amount of $25-28 million.


However this segment is to face challenges too for its upward curve in the economy. Infrastructure, rising property price, multiple layers of tax, shortage of skilled manpower, lack of clear policy on FDI, underdeveloped supply chain to name the few.

Yet the India Inc to brave all these hurdles to be amongst the developed economy.