The CII-BCG report titled “Retail transformation: Changing your performance trajectory”, unveiled at the CII National Retail Summit on 15 January assesses the impact of retail trends and imperatives for retailers to win in this emerging landscape. The CII-BCG report suggests overall retail market has the potential to grow from USD 630 Bn in 2015 to USD 1100-1200 Bn in 2020. Organized retail and ecommerce will grow rapidly to be worth USD 140-160 Bn and USD 45-50 Bn respectively by 2020. Retail sector will reap the benefits of a large, young population adding to the workforce, 70% increase in income levels, nuclearization of families and increasing urbanization.
The report also highlights the challenges faced by Indian organized retailers in terms of value conscious & digitally connected consumers, lower bargaining power against suppliers, strong competition from traditional retailers & ecommerce as well as regulatory barriers. These factors result in lower profitability and return on capital for India retailers in comparison with other sectors and global retailers. The report highlights that a transformation effort that can change the performance trajectory of a company can be undertaken. Senior leadership needs to therefore craft a large- scale transformation agenda based on three priorities – Winning in the medium term to establish competitive advantage through strategic/ structural moves, Rapid cash release in the short term from current business to fund the journey and building capabilities to be future ready.