The latest BMI India Retail report (Q4, 2011) pegs the Indian retail industry at 411 billion USD, projected to double by 2015. That's an enormous growth rate and this only accelerates further when we talk about the organized retail that stands today at 6% of the entire retail pie - at roughly 25 billion USD. To sample the implication of this growth, consider this - a whopping 6 million sq. ft. of retail space was added just in the first half of 2011! Online retail itself is growing at 35%, annually. The point is - at 22% of the GDP, the potential and importance of the Indian retail industry is unquestionable.
With high growth (and low entry barriers), comes high competition. And, high competition has its own set of implications for the industry, the root of which is - you cannot afford to lose on customer service. In supply chain terms, your supply chain reliability and responsiveness have to be (and perceived, too) best or at least at par with the competition. Moreover in growing economies like India the retail industry is typically characterized by volatility which translates to a strong need for flexible and scalable supply chains.
Now, when we speak of competition and high volumes, we can’t leave out the most important aspect of profitability (and survival) - Cost! Customers today have more choices than ever before and the Indian customer does not only demand more value but it expects this at less cost. 'More for less' seems the mantra, this season and its here to stay.