Retail Sector Opportunity and Threats

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Indian retail industry is dividing into organized and unorganized sectors. Organized retailing refers to trading activities undertaken by licensed retailers, that is, those who are registered for sale tax, income tax, etc. these include the corporate-backed hypermarket and retail chains, and also the privately owned large retail businesses. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing for example, the local kirana shops, owner manned general stores, paan shops, convenience shop, hand cart and pavement vendors, etc. Opportunity:

* India is among 10 largest retail markets in the world.
* Urbanization
* Location advantage.
* Falling real estate cost
* E-retailing
* Changing consumer habits and lifestyles.
* The retail sector in India is worth USD 394 billion and is growing at the rate of 30% annually. * India is the least competitive as well as least saturated of all major global market. This implies that there are significantly low entry barriers for players trying to setup base in India in term of the competitive landscape. * A good talent pool, unlimited opportunities, huge markets, and availability of quality raw materials at cheaper cost is expected to make India overtake the world’s best retail economies by 2040, according to industry players. * Currently, the market share of organized modern retail is just over 4 percent of the total retail industry, thereby leaving a huge untapped opportunity. * The composition of the Indian population is shifting towards the age group of 20-49 i.e. the working population with purchasing power. * As per a Mckinsey report, of the current 204 million households in India, about 13 million households have the income to prop up growth of organized retail and this consumer segment is expected to grow at over 20% annually in the next eight years. * Rising disposable income: The second fastest growing economy has provided new...
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