Indian Retail Industry-Pantaloon Retail (India) Ltd. Part X (i)

Analysis of Competition in the Industry

India is seen as one of the fastest growing countries in the entire world. Prior to the recent global recession, Indian economy was growing at a rate of almost 9-10%. Such an economic growth is actually the reflection of the sound financial health of various industries in the country. Retail industry, one of the most important industries in the country, has also grown at a significant rate over the past few years. The industry is expected to grow at a rate of 25% annually. The obvious response is that, the retail industry is now seen as a sea of opportunities by individuals as well as organizations which make it one of the most competitive industries in the country.

Four to five years back, 98% of the country’s retail sector was dominated by unorganized retail stores that mainly included street vendors and counter-stores. There were hardly any big players in the industry. With inadequate infrastructure and a population that believe in saving rather than in spending, the Indian retail sector was not considered as attractive by the large corporations. However, situation started to change when it was realized that actually it is a USD 320 billion industry that is growing at a rate of 5% (Compound Annual Growth Rate) and making significant contribution (39%) in the country’s GDP (Stanford, 2007). Such interesting figures gradually made the large organizations of the country show interest in the industry. During 2006-07, only 2% of the Indian retail sector was captured by the organized retailers. However, the sector is growing at a whopping rate of 35%. It is expected that by the end of 2010, the industry would cross the INR 1000 billion mark. In 2007, it was predicted that the organized retail in India will become a 66.43 dollar industry by 2010. Furthermore, it is also expected that by 2025, India will be the world’s fifth largest consumer market. In 2007, overall retail industry in the country was expected to grow by only 40-45%, but the organized retail industry, on the other hand was expected to grow by almost 200% by 2010 (Arnette, 2007). Such exciting figures and expectations have made the regional as well as global organizations give more and more attention to the Indian retail especially to the organized retail industry.

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