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Retail set to grow 5-fold in five years

Big leap

Calcutta, June 24: The organised retail segment in India is expected to grow five-fold to touch the $200-billion-mark in the next five to seven years from $40 billion now, a report by the CII and The Boston Consulting Group said.

“We find the transformation in FMCG and retail (segments) is critical to the profitable growth of the sector,” BCG senior partner and director Abheek Singhi said.

According to the report, the combined effects of demographic shifts and globalisation will continue to pose challenges to companies.

However, with the government expected to inject growth boosters, funds are likely to pour into the sector.

A wider range of premium brands is likely to be available this year, which will give consumers more options to choose from.

“Domestic brands and local companies remained dominant among the players operating in the retail segment in 2014,” said J. Suresh, chairman of CII National Committee on retail and managing director and CEO of Arvind Lifestyle Brands Ltd.

“Despite relaxations made to the rules on foreign direct investments in India, international companies remain cautious about India,” he said.

The report estimates that about 10 per cent of the retail segment will be in the organised format by 2015.

“We see the landscape in India changing gradually but steadily. Modern trade now forms a significant share of sales of most FMCG companies in several large cities. Retailer capabilities in terms of merchandise display and planning, supply chain, and handling a wider network of suppliers at source is also improving. Hence, it is important for retailers to make the best of this favourable trend,” the study said.

 
 
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