IT companies’ next hot destination – Indian retail industry

Infotech Lead Asia: Indian retail industry is becoming the hot destination for IT companies.

Delloite says the Indian retail industry rose 10.6 percent between 2010 and 2012 and is expected to increase to $750-850 billion by 2015.

There are several facts to support this.

Retail growth in India

Vipul Jain, CEO & Promoter, Unique Infoways, recently said the company’s HOT IT mega mall at Nehru Place Metro Station will have 12,000 footfalls per day. The store, which houses around 100 IT brands, targets sale of Rs 20 crore per month. HOT store was opened on June 13.

Food and grocery is the largest category within the retail sector with 60 percent share followed by apparel and mobile segment, said Delloite.

Reliance Industries’ retail business posted 42 percent growth in revenue to Rs 10,800 crore in the last fiscal. The business achieved cash breakeven with earnings before Depreciation, Finance Cost and Tax expense (PBDIT) of Rs 78 crore.

RIL witnessed store sales growth ranging from 7 percent to 18 percent across format sectors over last year.

IBEF says the $500 billion Indian retail market, growing at an annual rate of about 20 per cent, is largely dominated by small shops and stores as of now.

India’s organized segment accounts for 8 percent of total retail landscape, according to a study by Booz & Co and RAI.

Online retailers are emerging as important sales channels for consumer brands in India as more and more people, especially the young generation, are shopping online.

Online retail in India is projected to grow to $76 billion by 2021, accounting for over 5 percent of the Indian retail industry, according to a report by advisory services firm Technopak.

RP-Sanjiv Goenka Group’s Spencer’s Retail will invest about $100 million to set up new stores and come out with branded and co-branded products in the food and beverage segment.

Spencer’s will set up 80 hyper stores in the next 48 months. As of now, the company has 132 stores, including 26 hyper stores, 14 super market and 92 daily (convenient) stores.

Godrej Interio, the furniture retailing arm of Godrej Group, is aiming for $837.14 million of turnover by 2016-17, with plans to invest over $50.23 million to expand manufacturing capacity and retail stores. The company is planning to set up more than 75 stores in 2013 with focus on tier II and III cities.

IT in Indian retail

According to a report available with Research and Markets, the global retail industry IT spending market will grow at a CAGR Of 4.88 percent over the period 2012-2016.

One of the key factors contributing to this market growth is the growing need to adopt customer-centric technology.

The global retail industry IT spending market has also been witnessing an increased adoption of cloud services. However, data security concerns could pose a challenge to the growth of this market.

The key vendors dominating this market space include Cisco Systems, Dell, HP and IBM.

The report says the increased use of cloud services by retailers is expected to have a positive impact on the global retail industry IT spending market.

Due to the increased awareness among Indian retailers, service providers are increasingly looking at developing the existing cloud computing services. Moreover, further advancements in cloud computing technology could help address data security and management issues.

Indian retail is booming. IT will support its growth in coming years.

Baburajan K
[email protected]


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