Indian retail business values at around US$ 550 billion as of now and about four per cent of it accounts for the organised sector. A report by Boston Consulting Group (BCG) has revealed that the country's organised retail is estimated at US$ 28 billion with around 7 per cent penetration. It is projected to become a US$ 260 billion business over the next decade with around 21 per cent penetration.
Another report by Business Monitor International (BMI) suggests that enhancing middle and upper class consumer base has set vast opportunities in India's tier-II & tier-III cities. The greater availability of personal credit, improved mobility, better tourism et al, are all small, but significant contributors to the growth of Indian retail industry. Also, more and more companies are willing to invest in India due to significant growth forecasts on gross domestic product (GDP) (BMI predicts average annual GDP growth of 7.6 per cent through 2015).
Without wasting any time to react on the Indian Government's decision of allowing 100 per cent foreign direct investment (FDI) in single-brand retail, luxury brand retailers have announced their expansion plans in Indian markets. Brands like Vertu, Christian Loubotin, Armani Junior, among others, will open their exclusive stores at DLF Emporio in early 2012, while brands like Van Laack and Diesel Black Gold will commence their operations by January 2012 itself.
A report by CII-AT Kearney revealed that Luxury brands market in India grew at a healthy 20 per cent during 2010 reaching a size of US$ 5.8 billion. It further stated that the Indian luxury market stood at a value of US$ 4.76 billion in 2009 and is anticipated to be worth US$ 14.7 billion by 2015.
Where on one hand the luxury electronics and car segments registered a growth of over 35 per cent, fine dining grew by almost 40 per cent in 2010. Apparel and accessories, watches and personal care witnessed a substantial growth rate, between 24-30 per cent.
Similarly, India has surpassed the US to become the third largest men's luxury jewellery market in the world in 2011, stated the researcher Euromonitor International. The researcher's study projected Indian men's jewellery market at Rs 954 crore (US$ 183.76 million) in terms of sales and made an anticipation for it to grow 36.4 per cent in 2012.
After the US, Germany has also come up in full support of FDI in retail in India. Metro AG, one of the prominent German retail chains, has shown intentions to venture in Indian markets along with US' Wal-Mart and France's Carrefour.
Cumulative FDI inflows in single-brand retail trading during April 2000 to September 2011 stood at US$ 44.45 million, according to the Department of Industrial Policy and Promotion (DIPP).
Certain developments and investments that took place on the Indian retail canvas recently are discussed below-