The survey estimates that by the year 2005, the established players will reach saturation levels in the metro cities and will shift their focus to other Class I cities.
By the year 2010, the survey predicts that there will be little difference between the metros and the next 20 cities (the present million plus cities). Demographic trends in India too are likely to have an impact on the retail sector. It is estimated that the number of people between the age group of 40 and 60 years will go up by 30 per cent in the next 10 years.
This will lead to growth in sales of products such as cosmetics, skin care, hair dyes and so on. Home improvement and financial services firms would also benefit from this trend, according to the survey.
On the other hand, the number of children (0-15 years) is expected to remain stable at 30 million in the same time period. This implies a lesser growth for toys, games, and some apparel segments. But given the current nascent stage of growth, these sectors will still offer high growth rates.
Another trend that is likely to be visible in India will be the fact that retailers will adapt more than one format. It is expected that by 2010, the top retailers in the country would be operating at least three to four formats.
The survey predicts that the balance of power between retailers and manufacturers will shift towards the retailers. "The biggest retailers would be able to seek the lowest prices, require their suppliers to assume greater business risk and collaborate with suppliers to achieve overall cost reduction in their operations," it says. However, though the large retailers will be controlling a substantial portion of the retail market, small retailers will continue to survive on the basis of their core strengths of personal relations with customers and closeness to homes. Also, to compete with the large retailers, small retailers will form cooperatives for purchasing.
The complete findings of the survey will be presented at a seminar on `Opportunities in Retailing and Franchising' organised by the Federation of Indian Chambers of Commerce & Industry in collaboration with the Franchising Association of India, Federation of Karnataka Chambers of Commerce and Industry and the Greater Mysore Chamber of Industry.
The seminar, which will be held in Bangalore on April 18, will cover issues facing the Indian retail sector. Speakers at the seminar will include officials from major companies such as Hindustan Lever, Nestle India, Cadbury, ICICI and Apollo Healthcare among others.
Source: Business Line