If you are convinced about the Indian consumption growth story, you may not want to miss investing in the retail sector in India. DSIJ Research Team summarises the prospects of one of the fastest growing sectors in India and throws some light on the performance of the retail stocks...
If there is any single industry that can gain the most from the growing Indian economy, it is the retail industry in India. The Indian economy being the fastest growing economy in the world has attracted a lot of attention of global investors. Indeed, a host of global retailers are vying for a larger pie of the Indian retail industry that promises to grow by close to 20 percent CAGR in the next three to five years. India’s retail sector is projected to grow to $ 1.3 trillion by 2020 from the $672 billion in 2017.
There is no doubt that India’s retail sector is growing at an unprecedented speed owing to the trend of rapid urbanization and digitization, improving disposable incomes and lifestyle changes of the middle class. The consumption growth story is intact and it is one of the most credible growth stories in India. The rising consumption story in India has managed to make the Indian retail industry the fastest growing retail market in the world.
The retail industry has come a long way in the past couple of decades. The shift from the traditional shops to large multiformat stores in malls offering global experience and the emergence of e-commerce is shaping the fortunes of the retail industry in India. The advent of e-commerce and the mall culture in India has pushed the overall consumption higher to unprecedented levels.
The Indian retail industry has been traditionally unorganized. With the GST now a reality, the organized retail sector is gaining traction and is on a faster growth trajectory. Organized retail is growing at a rapid pace of about 20-25 percent annually. By 2020, the organized retail penetration is expected to be over 10 percent of the total Indian retail market. Currently, the organized retail market is just 7 percent of the total market.
This story is from the March 4, 2019 edition of Dalal Street Investment Journal.
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This story is from the March 4, 2019 edition of Dalal Street Investment Journal.
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