FDI restrictions to remain - Scindia
2:03 PM | 
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Indian Retail
Scindia enclosed an ICRIER study to back his statement, which pegged the retail trade increase at 10 per cent per annum from US $10 billion in 06-07 to US$ 496 billion in 11-12.
The study nails the growth of the organised retail segment at a sizzling pace of 45-50 percent with an anticipated market share of 16 percent by 2011-12.
Interestingly, the study makes a pitch for opening up the retail trade sector as there was no grounds of employment in the unorganised retail segment being effected by the growth in the organized retail segment.
The study is also of the belief that Farmers and consumers both will benefit significantly by the farmers selling straight to the organized retail merchants.
The ICRIER report says that farmers selling direct to the organised retail merchants realizes upto 60% more profits than sellling to middlemen such as the mandi's (wholesale markets).
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Retail Math - 1
Profit / (Loss) = Gross Margin – Expenses
Expense % = Expenses (Rs) / Net Sales (Rs)
Gross Margin % = Gross Margin (Rs)/ Net Sales (Rs)
Profit % = Profit (Rs)/ Net sales (Rs)
These formulas are used globally and are applicable to Indian Retail as well.
more later...
Retailing in India
Rated as the top destination for retail by GRDI again this year, India remains ahead of China and other destinations for retail investment. With a population of 1.2 bn and organized retail still below 6%, Indian retail is unexplored, providing tremendous opportunities for domestic as well as foreign retailers.
The opportunities not only lie with front end retail, but a multitude of opportunities lie in the back end. Service providers, retail software companies, housekeeping and security services, training, you name it and these sectors for organized retail are unexplored.
With the boom in Indian Retail, massive infrastructural development is expected in the coming years. Malls, shopping arcades have started mushrooming, not only in Teir1 cities, but in Tier2 and Tier3 cities as well. The economy will receive a boost with the investments. The current unemployment rate in India is estimated at below 7%. The population itself is young with a median age below 26 years.
Large Indian business houses have already invested or are investing in Retail. Key foreign players have also set shop, some directly, but most in partnerships, because of the Indian Government's stand on Foreign Direct Investment (FDI). It is only a matter of time, the Indian Government will relent it's stand and floodgates with open for investments.
The Indian retail market has a lot of space and there is demand and appetite for merchandise. Established foreign players will find it easy to generate better returns in India.