The Indian retail market – the fifth largest retail destination globally – is estimated to grow from USD 330 billion in 2007 to USD 427 billion by 2010 and USD 637 billion by 2015. India has over 12 million retail outlets out of which nearly 5 million sell food and related products. Though the market has been dominated by unorganized players, the growth of organized retail is catching up. The Indian organized retail is 3.6 percent of the USD 330 billion market, and is expected to grow at a CAGR of 30 percent by 2010. The fastest growing segments in the organized retail have been wholesale cash, carry stores, supermarkets and hypermarkets.

With changing lifestyle, income growth, the huge number of malls coming up and the growing number of customers for luxury goods, the Indian retail is undergoing structured change and expansion towards a more organized sector. Most corporate players entering into retail are penetrating food and grocery segments, which is also the major area where consumers are spending. However other retail formats are also picking up. Reasons such as economic growth, increased disposable income and evolution of Indian consumers’ behavior in line with their western counterparts shall augment the cause of other format of retails.

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There is greater focus towards supply chain management and its integrating aspect with regard to the whole business. The supply chain reinvigoration is opening up a new market for technology providers. IT companies such as CISCO, Nortel and other network equipment providers may look at this market as a blue ocean for their products. Comparing organized retails value chain in India vis-à-vis their global counterparts, Indian retailers are still at a very nascent stage of evolution, which itself reckons the overall opportunity that the sector holds for other sectors which can feed into Indian retail.

In addition to this, several global retail giants are using India as a hub for sourcing two broad categories of services, viz. sourcing products for their shelves and sourcing back office operations. Global giants are using India as a sourcing ground for their operation-specific clusters to pacify their needs. Global retailers such as GAP, WalMart are already tapping into the retail opportunity in a passive way. Global retailers are also using India’s prowess in IT and BPO to fulfill their application development and support requirements.