By BRIJESH OJHA MBA (Marketing) B Tech. (Electrical Engg.) PGDRM (Retail Management) M Phil. (Economics)
© Brijesh Ojha
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According to a UN report on the state of world population, by 2008 close to 3.3 billion people had shifted to cities and almost 5 billion will shift by 2030. The next few decades will see an unprecedented urban growth in the developing world, notably in Africa and Asia. By 2030, the towns and cities of the developing world will make up 80 per cent of urban humanity. This urbanization trend provides both a setting and a perspective for reviewing the emerging retail juggernaut on the Indian scene. For, growth of organized retail is predominantly an urban phenomenon. The prospects of organized retail are determined by the level of urban population. Analysts suggest that urban families spend 2.5 times more than rural families. In India, urban population is growing at a CAGR (cumulative annual growth rate) of 2.4% annually. India will, thus, have an urbanization of 30%, increasing to 32% by 2015. In Brazil, one of the BRIC economies, urbanization level is 85%. The Brazil organized retail has a 36% market share of total retail. In China, organized retail has a 20% market share of total retail, with 42% urbanization level. Skeptics point out that India does not have China’s booming manufacturing sector that helped Chinese rapid urbanization. Manufacturing sector creates urban centres whereas service sector comes later to service the urban centres. India currently has service sector dominance. (1) Chandigarh, (2) Nagpur, (3) Goa, Kochi, (4) Visakhapatnam, (5) Ahmedabad, (6) Bhubaneswar, (7) Jaipur, (8) Mysore, (9) Indore, (10) Lucknow, (11) Coimbatore, (12) Guwahati, (13) Ludhiana, (14) Surat, are the fastest growing cities of India and organized retail is likely to target these and growing towns neighbouring mega-cities. We must...