Retail sector set to reach USD 1750 bn. by 2026: FICCI-Deloitte report
NEW DELHI, 9 October, 2018: Mr Ram Vilas Paswan, Union Minister of Consumer Affairs, Food and Public Distribution, today advised industry to win the trust of the consumers and uphold their rights through transparent and legible product labelling in Hindi and regional languages too.
The onus was on industry to keep consumers' interest supreme, he said, while speaking at 'Massmerize 2018', the annual retail, FMCG & e-Commerce Conference, organized here by the Federation of Indian Chambers of Commerce and Industry (FICCI).
Mr Paswan said that the consumers had the right to be correctly informed of the weight and volume of the product, the MRP, date of manufacturing and expiry of a merchandise. These should be of a size that is readable, and preferably be in languages other than just English. This would enable the consumers to make informed choices, he added.
He said that the government, on its part, had evolved standardization norms which were enshrined in the new BIS Act of 2017 as, "We would like to see that Indian products are in no way inferior than their foreign counterparts to enable them to compete globally," he said.
Mr Paswan also released the FICCI-Deloitte report, 'Consumer LEADS' on the retail, FMCG & e- commerce sectors in India.
Mr Sanjiv Mehta, Chair, FICCI FMCG Committee and Chairman & Managing Director, Hindustan Unilever Ltd. spoke of innovation, purpose and leadership, the trio that will propel manufacturers to transform their business models. Innovation, he said, will remain the lifeblood of FMCG companies and the winner would be the one who does better. Today???s millennials, he said, were acutely aware of the brands and their purpose. This was revealed by an internal HUL survey which found that a third of the consumers chose brands that were environmentally- friendly. In addition, managements backed by a resilient team, needed to be agile and remain brutally optimistic.
Mr Krish Iyer, Chair, FICCI Retail & Internal Trade Committee and President & CEO, Walmart India Pvt. Ltd, said that retail was the kingpin in the value chain. It drives consumption which propels demand, production and consumption in a virtuous cycle. Food retail, he added, played a critical role as it had the potential of doubling framers??? income in the next five years and reducing food wastage.
Mr Rashesh Shah, President of FICCI, said that with the average age of the Indian people at 27 years, consumption was one of the key drivers of the economy. India, he said, was a 2.5 trillion dollar economy, the sixth largest in the world, and was poised to become the third largest by 2025. "We have moved away from the era of shareholder capitalism to stakeholder capitalism," he said and added that several constraints still dog the economy. Important issues needed to be addressed such as infrastructure bottlenecks and skill gaps and making consumption scalable in the face of low unit economies.
Mr Madhusudan Gopalan, MD & CEO, P&G, India Sub-Continent, outlined three focus areas for industry - engaging with the consumer through the media ecosystem where awareness creation was done transparently and certified by an independent third party; responsible advertising and driving brands as a force for growth and good of the society.
Mr Ahmed El Sheikh, President & CEO, PepsiCo India, said that the marketplace required a developed physical infrastructure for connecting with the consumer, digital infrastructure for integrating the fragmented value-chain and regulation. The need of the hour was 'glocal' - global brands with local expertise and ethos.
Mr Frederic Widell, Vice President, Head of South Asia & MD, Oriflame India, said that the direct selling industry had a great future in India and Oriflame remained committed to women's empowerment. This was exemplified by the fact that 85% of the company's sales force constituted by women.
Mr. Raghava Rao, Co-Chair, FICCI E-Commerce Committee and Vice President Finance & India CFO, Amazon, gave a vote of thanks.
E-commerce is expected to grow at a CAGR of over 30% during 2016-21
The FICCI- Deloitte report, 'Consumer LEADS' states that India is one of the fastest growing major economy in the world, leading to a high growth consumer and retail market - thus presenting massive investment and business opportunities in the retail space. The Indian retail sector is expected to reach at USD 1,750 billion by 2026 with a CAGR of 7.8%. E-commerce is expected to grow rapidly in India, one of the fastest in Asia as well as globally, at a CAGR of over 30% in the period 2016-21. Also, while unorganized format dominates the retail market, share of organized segment is rapidly growing. Further, food & grocery is the major segment, accounting for 65% of retail market.
Additionally, the report reveals that emerging fields in the technology sector ranging from precision farming to data analytics have the potential to increase the efficiency of businesses significantly, providing more opportunities for the FMCG, retail and e commerce sectors. The report presents interesting company case studies including discussions with senior stakeholders of the FMCG, retail and e commerce sectors in India, thus offering a comprehensive view of the opportunities and issues in the sectors.
"Healthy growth of the Indian economy (real GDP growth rate of over 7% estimated for 2018) coupled with favourable demographic factors in the country are expected to drive growth in the retail, CPG and e-commerce industries. While the retail industry is forecasted to grow at a CAGR of over 10% in the four-year period from USD 795 billion in 2017 to reach USD 1,200 billion by 2021, the e-commerce market is predicted to increase by over 30% over the same period to reach USD 84 billion in 2021 from current USD 24 billion.
The report outlines a holistic roadmap for industry covering strategy, operations, organisation, processes and systems. Through this approach consumers can fully leverage the potential of the all the contemporary channels accessible in their interface with business.
FICCI MEDIA DIVISION
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