The final day of India Fashion Forum 2011 saw the release of the Images Year Book which in true tradition beings the round up of the past year. Voicing the thoughts of the industry, it is a repository of knowledge, important view points and landmark events.
Moving on the day witnessed serious discussions on the key challenges and future outlook of the Indian fashion retail market. The discussions ranged from the impact of real estate price hike on retail margins to growth prospects of home fashion retail as well as emergence of fashion accessories as a key business segment in fashion retail.
Interesting insights which emerged during the Retail Entrepreneurs Conclave anchored by Amit Bagaria, Chairman and CEO, Asipac included the growing contribution of modern retail and the key challenges faced by the overall retail sector. Asipac pegs the Indian retail market at Rs.23.53 lakh crores out of which the modern retail is only about Rs 2.21 lakh crores. The retail market is estimated to reach Rs 40 lakh crores in the next five years. Out of the Rs 16 lakh crores addition, approximately one-third or over 5 lakh crores will be contributed by modern retail. Asipac expects modern retail to grow to about Rs.7.7 lakh crores by FY2016. The key challenges for the retail sector are expected to be availability of quality space, manpower and getting the right merchandise mix to cater to a larger percentage of the buying population.
Retailers have to learn to cater to a larger percentage of the population. India’s urban population is 360 million, and will reach 508 million by 2020. Of the 148 million additions, 96 million will be Migrants from Rural India (MRIs). More than 60 million migrated in the last decade. So, in 2020, 156 million urban Indians will comprise MRIs of the last 20 years. The geographical spread is equally important. Being present in the Top 30 cities alone will not be enough. National retailers have to cover 120 cities and towns to truly capture the potential of urban India. Incidentally, the market potential is so huge that even during the peak recession; Indian retailers witnessed growth rates between 2 – 16 per cent.