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1.1 Retail Value Proposition

The value proposition that retail offers to a consumer is easy availability of the desired product in the desired size at the desired time.

1.2 Retailing in India

• Total Consumer Spend in the Year 03-04 - INR 9300 billion (USD 375 billion) growing over 5% annually

• Retail sales - 55% at INR 280 billion (USD 205 billion)

• Organised Retail - Only 3% but growing at 30%

• Organised retail to cross INR 1000 billion mark by 2010

• INR 200 billion investment in the pipeline

• Top 6 cities account for 66% of total organized retailing

1.3 Trends Affecting Indian Retail Industry

• Changing age profile & Disintegration of joint family
  India is believed to have an average age of 24 years for its population as against 36 years for the USA and 30 years for China. A younger population tends to have higher aspirations and spends more as it enters the earning phase. Also, nuclearisation of families has led to enhanced demand.

• Growing disposable income
  More Indian households are getting added to the consuming class with the growth in income levels. Also, with declining interest rates, the aversion of domestic consumers to taking loans is also fast disappearing.

• Globalization
  Growing media penetration is leading to a convergence of aspirations of various classes of consumers, bridging the rural-urban divide. The modern consumer cannot be satisfied by any product or service that is lesser in quality than the best offered in any other place on the globe.

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* Contributed by -
Harmesh Mehrotra & Manu Arora,
MBA (IB) 2004-2006,
School of International Business,
Indian Institute of Foreign Trade, New Delhi.