Business Standard, MUMBAI, 30 November 2006
The growth of financial sector was to a large extent responsible for the current consumption boom in the country and that there ought to be further collaboration between financial service providers and retailers to keep this going, said Suman Bery, director general, NCAER, at the National Retail Summit 2006.
“Sentiment is a big driver behind consumer behaviour and retailers should get ready for a bumpy ride ahead,” he added. Commenting on other factors that will boost growth, Roopa Purushothaman, chief economist and strategist, Future Group, pointed out how increase in the number of women in the consuming class would give a boost to retail.
“Increased participation of women on the professional front will result in an increased demand of 10 per cent over the next five years while per capita income will be boosted by five per cent by 2015, 12 per cent by 2025 and 25 per cent by 2050,” she said adding that at present, the country was at a ‘sweet spot’, where it could improve its demographic ratios.
Ireena Vittal, partner, McKinsey & Co, clarified a few myths surrounding the sector saying that changing demographic patterns and not changing incomes would determine the consumption patterns in India.
“Increasingly, as women and younger people enter the consuming class, the product mix will undergo a tremendous change,” she said adding that because of that reason, it wasn’t possible to compare the consumption mix in India at present to the kind of consumption mix seen in other countries, when they were at a similar stage in retail.
Devangshu Dutta, CEO, Third Eyesight, pointed out that it was important to look at an Indian model of retail development given the kind of disparities that existed in the Indian market.
“It is as important to share the growth downwards as much as we are pulling it upwards in terms of aspirations,” he said.
Though the retail sector in India is expected to grow rapidly over the next few years, analysts point out that this will definitely not be a smooth ride.
As the market develops, it will see its share of ups and downs, and just because it’s at a nascent stage does not mean that the going will necessarily be good.