THE CONFERENCE PROCEEDINGS - IFEAT

Supply Side DriversGrowth of RetailFrom US$ 535 billion in 2012-13, Indian retail is expected togrow to US$ 755 billion by2018.Supply- Side Drivers – Growth of Modern RetailsGrowth of Retails (US$ Billion)Modern Retail - At current sizeof US$ 73 billion, and withfresh investments over the next5-7 years, modern retail willshow impressive CAGR(Compound Annual GrowthRate) of more than 30%.Traditional Retail – In absoluteterms, Traditional Retail willgrow more than Modern Retail,in the next 5 years. From theSource : Technopak Analysiscurrent 9 million, the numberof outlets selling FMCG is expected to increase to 11 million by 2013 and 16 million by 2018. Insummary, Traditional Retail will grow slower in percentage terms, but will continue to occupy a verydominant share of FMCG sales over the next 10-20 years.Low Labour CostIndia has by far the lowestlabour cost compared to manyemerging countries giving it anedge for establishingmanufacturing base for bothdomestic and internationalFMCG brands. Average labourcost in India is US$ 110/monthcompared to US$190/month inChina, US$ 210/month inThailand and even higher atUS$1,300/month in Taiwan.Supply- Side Drivers – Low Labour CostLabour Cost (US$ Per Month)Source : CEIC, Morgan Stanley Research and Investment commission of India, 201131