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Retail Intelligence: Changing Landscape of Indian Retail

​​India’s retail sector has undergone a rapid transformation over the past decade and this process is expected to strengthen in coming years with the rise in population, per capita income and urbanisation. According to the provisional estimate by the Census of India 2011, the country’s total population has reached nearly 1.21 billion compared to the 1.03 billion recorded in the previous census of 2001. This tremendous growth in population has led to an unprecedented scale of urbanisation, with the share of urban population increasing to 31.0% in 2011 from 28.0% in 2001.

According to the United Nations, India has the highest rate of change in its urban population of all the BRIC nations and this figure is likely to remain above 2.0% annually for the next three decades. Nearly 64% of the Indian population is in the working age group of 15-64 and 35.0% is relatively young, aged 15-34. As per IMF estimates, the per capita GDP of the country was INR 46,221 per annum at end- 2011, a figure that is forecast to rise to INR 58,224 by end 2015.

With India’s growing per capita income and a rising middle class, the retail sector has the potential to be the real growth engine of the country’s economy. While demand for a superior shopping experience is evident in the metropolitan cities, the Tier II and Tier III towns are also rapidly acclimatising to the changing landscape of the Indian retail market. Growing consumerism, changes in consumers’ tastes and preferences, and heightened brand consciousness has been fast replacing traditional mom and pop stores with organised retail malls that house lifestyle and luxury brands from national and international retailers.

As part of its retail transformation, India has seen substantial increase in mall space in recent years. Over the past decade, such cities as NCR-Delhi, Mumbai and Bangalore have shown prominent growth in retail stock, while Hyderabad, Pune, Chennai, Kolkata and many other Tier III towns are rapidly emerging as the retail growth corridors of the next decade.

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