Corporatised retail is making inroads in the apparel sector in India. From just eight per cent in 2013, corporatised retail — that is retail businesses-owned and managed by a limited company or a partnership firm — is set to shoot up to 24 per cent by 2023, according to industry estimates.

From $5 billion in 2001, the size of corporatised retail has jumped to $34 billion in 2012. At present, though corporatised retail is estimated at eight per cent penetration of the total retail sector, apparels tend to enjoy a significantly higher share of corporatised retail at 20 per cent, according to Ankur Bisen, Senior Vice-President, Retail, Technopak.

Stating that the fashion market and apparel retail were expected to witness further penetration of corporatised retail, Bisen said it would drive growth beyond major urban clusters. “Multiple retail formats across specialty retail, hypermarket, cash and carry and e-commerce will drive this growth. The share of coroporatised retail is poised to grow sharply over the next five years to contribute 28 per cent share by 2018,” he added.

A Technopak analysis has revealed that while the apparel market share in the total market was ₹2,27,940 crore in 2013, modern retail accounted for ₹45,590 crore of this in 2013, cornering a 20 per cent share. The research company has estimated that by 2018, the apparel market share in the total market would jump to ₹3,54,570 crore, and modern retail would account for ₹99,280 crore in 2018, with 28 per cent share.

“Though the footwear segment also reflects double digit penetration of 27 per cent in corporatised retail share, consumer durables and goods from the IT sector also hold 20 per cent share, just as apparel does,” said Bisen.

Many industry players maintain that the increasing penetration of corporatised retail in the fashion category has contributed to the improvement of the country’s retail ecosystem.

Corporatised retail has induced greater consumer spending due to improvements in product quality, reliable product specifications, and better management of store service levels, said Amit Gugnani, Senior Vice-President, Fashion, Technopak.

The lack of space, however, or affordable real estate continues to be the single biggest factor for corporatised retail’s inability to grow, he said.

Experts have said that even at a conservative estimate of 7 per cent, India’s consumption is expected to continue to grow. This growth would translate into the growth of merchandise retail. Hampered by the unavailability of space, corporatised retail would need to push ahead to cash in on this consistent increase in consumption.

Related Topics
comment COMMENT NOW