Retail sector may soon jump into a 9-10% growth mode: Retailers' Association of India
The Indian retail sector, pegged at $900 billion and growing at 5% currently, is expected to soon jump into a 9-10% growth pace, as markets seem quite ready with right consumer base and increasing spending power, according to the Retailers' Association of India (RAI), a trade body which represents chain store retailers, independent retailers, e-commerce players and retail service/technology providers across the country.
'Immediately after the pandemic, the retail sector got into a 20% growth, but in the last one year the growth has slowed to 5%, but we expect the growth to get into 9% to 10% range soon,' CEO Kumar Rajagopalan told The Hindu.
He said the emerging industry trends indicated increased consumption backed by the right consumer base and growing disposable incomes. 'So, we are soon expecting a jump in the pace of growth from current levels to match the market demand. We've got the population to support.'
According to him, India's growth towards becoming the third-largest economy is making a significant difference. ''So, everything is going towards better consumption, as per capita income increases, consumption increases. So I think there's a lot that's happening; however, the competitive framework of Indian retailing is also changing drastically,'' he added.
He further said the country's retail industry was increasingly becoming organised. For instance, 10 years ago, only 4% to 5% of the industry was under the organised category, while today, 17% of the total industry is organised.
'This conversion, from unorganised to organised, is happening on many fronts. Many of the traditional businesses are turning to be organised as the new generation takes over the leadership. Also, e-commerce is pushing the growth of organised businesses. Plus, various measures of the government are also encouraging retailers to get organised with the introduction of GST, digital money etc., streamlining and making retailing easier,'' Mr. Rajagopalan observed.
Commenting on the challenges faced by the industry, he said the industry knew the business was completely changing itself, with the omnichannel concept gaining wide acceptance. Customers were buying online as well as offline.
He also said there was a huge amount of competition happening in the sector because the barriers to entry are completely shattered now. So the industry was trying to see how they could adapt themselves to the growing needs of fast-paced consumers of the modern day, Mr. Rajagopalan said.
'There's a fight for a share of customers' time. It's becoming difficult to get the attention of customers. guess this is true for all businesses as customers are totally distracted by too many things around. So retailers have the challenge to make their messaging quite engaging, clear, and rightly attractive to customers,' he opined.
On the people front, he said, there were a lot of people available in the industry, but quality talent, retaining the existing talent and developing talent remained a big challenge.
The retail industry employs over 40 million people, probably the second largest after agriculture and allied sectors.
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