Recently published research from Business Monitor International, "BMI India Retail Report Q3 2012", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 07/03/2012 -- The Q312 BMI India Retail Report forecasts that total retail sales will grow from INR22.57trn (US$490.68bn) in 2012 to INR28.01trn (US$746.99bn) by 2016, a rise of 24.1%. Strong underlying economic growth, population expansion, the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast growth.
As well as an expanding middle and upper class consumer base, there will also be opportunities in India's second- and third-tier cities. The greater availability of personal credit and a growing vehicle population providing improved mobility also contribute to a trend of 7.1% average annual retail sales growth throughout the period.
India's nominal GDP is forecast at US$2.10trn in 2012. Average annual GDP growth of 7.7% is predicted by BMI through to 2016. With the population expected to increase from 1.26bn in 2012 to 1.32bn by 2016, GDP per capita is forecast to rise 78.5% by the end of the forecast period, reaching US$2,984.
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The growth in the overall retail market will be driven largely by the explosion in the organised retail sector. Domestic retailers such as Reliance Retail and Pantaloon Retail continue to invest heavily in increasing their store networks and improving in-store offerings, and the impact they have on growth will be boosted by the arrival of expansion-oriented multinationals.
Reliance Retail was looking to invest up to INR1.5bn (US$33mn) in 150 new stores by March 2011, adding to its existing 1,050-store network. CEO Bijou Kurien said: 'Now that the recession is over, several new and stalled projects will get started. We would focus on both value retail as well as specialty, non-food retail stores.' Reliance recently opened its 103rd Vision Express optical outlet in India in partnership with GrandVision.
Mass grocery retail (MGR) sales in India are expected to undergo enormous growth over the forecast period. BMI predicts that sales through MGR outlets will increase by 106% to reach US$68.35bn by 2016. This is a consequence of India's dramatic, rapid shift from small independent retailers to large, modern outlets, although it must also be noted that this growth is forecast to come from a very low starting point.
BMI forecasts consumer electronic sales at US$32.95bn in 2012, with over-the-counter (OTC) pharmaceutical sales at US$3.33bn. The former sub-sector is expected to show growth of 73.3% between 2012 and 2016, reaching US$57.10bn, with projected double-digit growth of key products such as notebooks, mobile handsets and TVs. OTC pharmaceuticals, meanwhile, should increase by 97.4% throughout the forecast period, to reach US$6.58bn.
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