New Retailing market report from Business Monitor International: "BMI India Retail Report Q1 2014"
Boston, MA -- (SBWIRE) -- 12/20/2013 -- India's retail sector is forecast to grow strongly over the next few years, with an emerging middle class and an expanding 21+ years age group resulting in a strong rise in household spending across all retail subsectors. We are particularly positive about the future growth prospects for personal, insurance & other spending; however, we expect food & drink expenditure to remain the highest throughout our forecast period, with spending on transport and housing also high.
The new India retail report provides an extensive and comprehensive forecast of various retail indicators including household spending and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts, and a detailed breakdown of household and per capita spending across a large number of retail areas including food & drink; clothing & footwear; furnishing & home; recreation & culture; personal, insurance & other, and a number of other subsectors. Overall, we see long-term potential in the local consumer market, particularly for non-essential items and aspirational purchasing by an emerging middle class. We forecast the average net household income to be US$6,354 in 2013, with the majority of households falling into the bottom wage bracket of US$5,000+.
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However, between 2013 and 2018, the percentage of households in the US$10,000+ wage bracket is forecast to rise from 9.9% to 22.2% of the total, which represents the key demographic for increased household spending on luxury items beyond necessities such as food, utilities and transport. We expect this to result in a corresponding increase in household spending on personal care and effects, high-end household appliances, restaurants and entertainment. Meanwhile, transport expenditure will also continue to rise as a larger number of households purchase cars and bikes and travel longer distances, including the purchase of holiday flights.
However, we note downside risks to our forecasts such as short-term concerns about the impact on India's economic outlook of fiscal and trade deficits that remain near historic highs. We note additional downside risks from the impact of depressed EU demand on the Indian consumer and on the ability of producers and exporters to realise returns in the short term.
Recent developments include:
- Italian sportswear manufacturer Lotto Sport Italia has launched two new footwear brands, Sabots and Calcetto, in India. The company plans to spend US$10mn by 2014 to corner 7% of India's branded sports apparel and equipment market.
- Retail brands such as United Colors of Benetton, Tommy Hilfiger and Puma are opening factory outlets to sell excess stock and attract price-conscious buyers.
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