India's retail market is likely to touch a whopping Rs 47 lakh crore by 2016-17, expanding at a compounded annual growth rate of 15 per cent, a Yes Bank-Assocham study says.
The retail market, which comprises both organised and unorganised segments, stood at Rs 23 lakh crore in 2011-12.
"Favourable demographics, increasing urbanisation, nuclearisation of families, rising affluence amid consumers, growing preference for branded products and higher aspirations are other factors which will drive retail consumption in India," Assocham Secretary General D S Rawat said.
According to the study, organised retail, which comprised a meagre seven per cent of overall retail market in 2011-12 is estimated to grow at a CAGR of 24 per cent and attain 10.2 per cent share of total retail by 2016-17.
On the supply side, retail sector growth will be backed by expansion plans of existing players and the entry of new players, the study said.
It also listed out the challenges being faced by the country's retail sector such as dearth of skilled manpower, numerous clearances required to set up a retail outlet and lack of basic infrastructure like roads, power and water.
Store-based retailing is likely to witness a CAGR of 7.6 per cent during 2011-16 and will grow by 44 per cent in absolute terms during this period, the study highlighted.
Amid traditional grocery retailers, kirana stores will continue to be the largest contributor to value share by 2016 and are likely to account for 61 per cent share in constant value sales, it said.