A major push to the real estate sector has also come from the expanding retail sector. With organised retailing currently accounting for only 2 or 3% of the market, there is untapped potential for high quality shopping mal development. According to a recent Assocham report, India’s retail sector is expected to grow at 7% to 280 billion dollars by 2010-11 from the present 200 billion dollars. This is likely to give way to a sizeable number of retail construction projects.
The pace of change in the retail sector is likely to accelerate as foreign investment in retailing has been liberalized. In 2006, 51% FDI in “single brand” retail outlets was allowed. Increasingly, organized retailing will focus on smaller cities (of over 1 million population), which are still largely unexploited.
Retail companies are also targeting the 300 million-strong Indian middle class, situated largely in tier 2 and 3 cities, as is evident from the number of shopping malls, multiplexes mushrooming here.
Several companies are making a foray into the retail sector. Reliance Industries Ltd. has floated Reliance Retail Limited with an equity investment of Rs. 10,000 crore Transaction analysis for foreign direct investment.
The Indian Retail market is witnessing a real revolution in terms of Growth and Development. With the entry of many large Foreign and Indian players into the Retail Indian trade, things are certainly hotting up and the consumer can look forward to having a much wider choice and greater ease in shopping. The Traditional market are fast loosing their shine, making way for new formats such as departmental stores. Malls are coming up not just in the metros but also in second–running cities, introducing the Indian Consumer to a shopping experience like never before. Even without FDI, Indian Retail is still growing and growing at an enviable rate.
Given the potential fo the Indian Market, Investment will devise its own way to flow in. If the front end is banned, it will enter through the back end. Rising incomes, increased per capital spending, rapid urbanisation and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. Over 200 malls with a combined retail space of 2.5 cr sq. are sprouting across the country at an investment of Rs. 12,500 cr, eight times of Rs 1,500 cr invested till last year. And further Malls are estimated to become a Rs. 38447 cr sector by 2010. Major Gaints like Bharti,ITC, Reliance, Tata, Rahejas, Pantaloon, Subiksha, Goenka (spencers) Walmart, Piramals, Adani Group, Next, Birla Group, are infusing staggering amounts of capital in the Indian Retail Industry.