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Young spenders will drive India’s economy: Australian author PDF Print E-mail

© Neena Bhandari, Indo Asian News Service

ImageAs the Indian consumer goes all out to seek new experiences from food and wine to luxury goods such as an in-home spa to exotic destinations, Australia is well placed to earn a good share from this spending spree, says Australian author Geoff Hiscock.

Hiscock's latest book "India's Store Wars: Retail Revolution and the Battle for the Next 500 million Shoppers" published by John Wiley & Sons has just hit the stands in India, and is available in Australia and Asia.

"Modern retail is well on the way to being the key driver of the Indian economy over the next decade because India's consumer demand is simply unstoppable. For Australian suppliers of a whole range of goods and services, that represents a marvellous opportunity over the next few years”, Hiscock told IANS.

The book explores the changes in the demographic profile, tastes and spending habits of the Indian consumer, how younger Indians have more confidence and are willing to borrow to finance their consumption.

Despite the recent shocks caused by the United States sub-prime crisis, young Indians are prepared to borrow money to buy a new two-wheeler or car, a digital TV, air-conditioner or even a house. They are also more aware of the sources of credit available to them, says Hiscock.

According to the latest research in the India Retail Report 2009, retail spending by Indian consumers is expected to rise from 13.3 trillion rupees now to 18.1 trillion rupees by 2010.

"That is a huge increase in spending, and we can put it down to the fact that not only are incomes rising, but younger people entering the workforce are more prepared to spend money than their parents were. The "save" mentality is being replaced by the "spend" mentality”, Hiscock told IANS.

For the author the most interesting aspect of India's consumer boom has been the far faster growth in the modern retail sector - hypermarkets, supermarket chains, mini-marts, department stores and specialist shops in shopping malls – than the traditional retail sector made up of the 12 million ubiquitous kirana stores, wet markets, bazaars and weekly or monthly rural fairs.

Until only a few years ago, modern retail's share of the total consumer spending was only 3 to 4 per cent. But after growing at more than 40 per cent in 2007, modern retail has a share of 5.9 per cent and by 2010 could have a 13 per cent share, according to report prepared by Images F&R Research, and released at the 2008 India Retail Forum held in Mumbai last week.

The book provides rich insights on the intriguing subject of what makes India tick and the challenges facing the country's retail sector.

For three years in a row (2005-2007), consulting firm A.T. Kearney has ranked India as the top retail destination globally, ahead of Russia and China.

"However, the outlook is not all rosy. Apart from the global economic situation, there are some specific problems India must contend with. Perhaps the most obvious is the poor supply chain, which leads to terrible wastage rates in the shipping of fresh fruit, vegetables and dairy. India desperately needs better logistics, including a comprehensive cold chain system in transportation”, the author warns.

"There is a lack of retail management skills and the information technology backbones necessary to run modern stores efficiently. Retailers face high real estate prices and extreme competition in the key metropolitan markets”, he adds.

The author also draws attention towards the volatile political environment where market middlemen, small traders associations, kirana operators and street vendors, fearful for their economic future, are opposing big domestic retail newcomers such as Bharti Group, Reliance Industries and Aditya Birla Group, and foreign contenders such as Wal-Mart.

“But overall, I'm confident India's modern retail sector can work through these issues, and the consumption boom will continue, thereby driving up India's growth rate," says the veteran journalist turned author.

Hiscock's other hugely successful books include `Asia's Wealth Club (1997), Asia's New Wealth Club (2000), `India's Global Wealth Club: The stunning rise of its billionaires and the secrets of their success' (2007).

© Copyright Neena Bhandari. All rights reserved. Republication, copying or using information from any www.india-voice.com content is expressly prohibited without  the permission of the writer and the news agency through which the article is syndicated.

 
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