Drishtikon: A Management Journal

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Impact of Global Recession on Indian Retail Sector


Affiliations
1 Raj Kumar Goyal Institute of Technology for Women, U.P., India
2 Rishi ChadhaVishvas Girls Institute of Technology, U.P., India
     

   Subscribe/Renew Journal


Today India is transforming from a socialist economy to a consumption led creative economy. The scope and depth of change that is taking place across India defies description. This change provides both a big challenge and a gigantic opportunity for marketers and retailers. India is the fast becoming the retail heaven of the world.

Retail in India is accounting for over 10% of G.D.P and 8% of employment. There are over 15 million retail outlets in India and 80% of these are small family businesses. The striking feature of Indian retail is duality - presence of modern and traditional retail. Small traders comprised of traditional retail have 96% share of retail sector and 4% share is occupied by modern retail. Corporate retailers however have plan to augment the share of modern retail from 4% to 15%-20% in next 4 years by investing more than $25 billion .The retail market in India is anticipated to grow to 427 billion U.S.D by the year 2010.

But due to global recession RETAIL confidence has plunged to a five-year low, in a sign the key sector might slip into a recession. Rising inflation and slower consumer spending, the main engine of economic growth had devoured profit margins and sales were also expected to fall. The retail sector has started tumbling. The manufacturing sector has sustained a severe hit. The tourism sector has been affected, too. Hotels have already reported 20-25 % cancellation from international tourists who were booked to visit over the next one year.

The reduced purchasing power of Indian consumers in the current situation has revved up competition among shopping malls. They now have to step up their ad spend along with discounts to lure consumers who have restricted their shopping list to essentials, such as food and other consumables.

But recession has been a roller coaster ride, which we don't know when it all will end. With each passing day, the ride seems to be getting more complex and clueless. However, the good part is, if there really is any, that we are not alone in this. The impact has been really hard and most of the industries under the sun are equally impacted by it. While we have read and heard about the various challenges that a recessionary economy presents, we should also look into the various opportunities that this recession has presented to us.


Subscription Login to verify subscription
User
Notifications
Font Size


  • Apparelanalyst.com

  • Business World

  • Business Today

  • Economics Times

  • Earnest & young, The Great Indian Retail Story.

  • Fibre2fashion .com

  • Indian Retail industry – its growth, challenges & opportunities by Dr. Dhanabhakyam & A. Shanti

  • Impact of retail management in the growth of Indian economy by Dr. S.S.Sudalaimuthu & S. devi

  • The inside scoop on top retail trends by Alf Nucifora

  • The Times Of India

  • Survey of Indian Industry 2008, The Hindu

  • Protecting Retail Brands By Mustafa Safiyuddin

  • Business Line, The Hindu

  • Building successful Indian Retail brands, by Sundar

  • www.Imagesretail.com

  • www.Indianretaling .com

  • Indian management: The Journal of the AIMA

  • Retail: Future of Business

  • P’S Business and marketing

  • WWW.BrandingStartegyinsider.com

  • Rama swamy and Nama Kumari, Marketing Management ,Mc Millan

  • Journal of marketing and communication

  • V.A. Pai Panandiker & P.K.J. Menon, Rural Industrialisation, Oxford & IBH Publishing Co. (P) Ltd., New Delhi.

  • Dr. T.P. Gopalaswamy, Rural Marketing, Wheeler Publishing, Delhi.

  • State of the Indian Economy, July 2008 by IBEF.


Abstract Views: 332

PDF Views: 0




  • Impact of Global Recession on Indian Retail Sector

Abstract Views: 332  |  PDF Views: 0

Authors

Sandeep Kumar
Raj Kumar Goyal Institute of Technology for Women, U.P., India
Sweta Bakshi
Rishi ChadhaVishvas Girls Institute of Technology, U.P., India

Abstract


Today India is transforming from a socialist economy to a consumption led creative economy. The scope and depth of change that is taking place across India defies description. This change provides both a big challenge and a gigantic opportunity for marketers and retailers. India is the fast becoming the retail heaven of the world.

Retail in India is accounting for over 10% of G.D.P and 8% of employment. There are over 15 million retail outlets in India and 80% of these are small family businesses. The striking feature of Indian retail is duality - presence of modern and traditional retail. Small traders comprised of traditional retail have 96% share of retail sector and 4% share is occupied by modern retail. Corporate retailers however have plan to augment the share of modern retail from 4% to 15%-20% in next 4 years by investing more than $25 billion .The retail market in India is anticipated to grow to 427 billion U.S.D by the year 2010.

But due to global recession RETAIL confidence has plunged to a five-year low, in a sign the key sector might slip into a recession. Rising inflation and slower consumer spending, the main engine of economic growth had devoured profit margins and sales were also expected to fall. The retail sector has started tumbling. The manufacturing sector has sustained a severe hit. The tourism sector has been affected, too. Hotels have already reported 20-25 % cancellation from international tourists who were booked to visit over the next one year.

The reduced purchasing power of Indian consumers in the current situation has revved up competition among shopping malls. They now have to step up their ad spend along with discounts to lure consumers who have restricted their shopping list to essentials, such as food and other consumables.

But recession has been a roller coaster ride, which we don't know when it all will end. With each passing day, the ride seems to be getting more complex and clueless. However, the good part is, if there really is any, that we are not alone in this. The impact has been really hard and most of the industries under the sun are equally impacted by it. While we have read and heard about the various challenges that a recessionary economy presents, we should also look into the various opportunities that this recession has presented to us.


References