close
This ad will auto close in 10 seconds

Organised retail to treble in next 7 yrs: BCG

"With consumption set to more than triple in size over the next decade, sales through organised retail are expected to reach between 14 and 21 percent by 2020 from 6 percent in 2010.



Mumbai: With consumption remaining strong in the country despite the recent dips, the organised retail trade is set to treble over the next seven years, says a report by Boston Consulting Group.

"With consumption set to more than triple in size over the next decade, sales through organised retail are expected to reach between 14 and 21 percent by 2020 from 6 percent in 2010.

"As organised retail takes shape, it could leapfrog to the status of the developed world and be more efficient," says the report titled 'Winning with Uncertainty' by BCG and industry body CII.

The overall retail market in the country is expected to touch USD 3,600 billion by 2020 from USD 900 billion in 2010.

"The domestic organised retail has been growing at a healthy compounded annual growth rate of 25 percent over the past five years. However, organised retail still forms under 10 percent of the market.

"In categories like food and grocery, organised retail contributes less than 3 percent of sales and this gap is the growth opportunity," says the report.

The report highlights the need for FMCG and retail companies to prepare for an increasingly uncertain future and proactively take measures to leverage market volatility.

It says uncertainty in business environment is primarily being driven by six structural factors -the changing macroeconomic scenarios; heightened volatility in commodity prices; uncertainty in policy-making; rapidly evolving consumer base and behaviour; emergence of new breeds of competitors within industries and development of game-changing technologies.

Consumer goods and retail sectors have shown strong resilience in the face of this uncertainty, the report observes and adds that to achieve faster growth, retailers will have to navigate through multiple roadblocks like supply chain inefficiencies and manpower shortage.

"To deal with challenges, retailers must be flexible in their offerings to consumers, as well as their execution models. Retailers should experiment with store formats, assortment mix, shopping experience, discount strategy to attune their offerings to changing consumer needs.

"They should also make their execution models nimbler by leveraging localised sourcing, backward integration, flexible lease agreements and manpower rationalisation," concludes the report.

PTI

From Zee News

0 Comment - Join the Discussions

trending

photo gallery

video