India's fledgling organised retail sector is expected to double in physical size in just three years. Although organised retail still only accounts for an estimated 3% of India's total retail market, the ambitious expansion plans of businesses point to a doubling of retail outlets and retail space in the next three years.

The report, produced by KPMG and the Federation of Indian Chambers of Commerce and Industry (FICCI), does suggest, though, that there could be a slight problem on the horizon with over-capacity in the new shopping malls becoming a distinct possibility.
Retailing in India is presently estimated to be worth US$200 billion, of which organised retailing accounts for US$6.4 billion. By 2010, that figure is expected to have grown to US$23 billion.

When interviewing a selection of retail CEOs for the report, KPMG discovered that 70% of the businesses expect to grow in excess of 40% a year in the next three years.

Commenting on the report's findings, KPMG's Deepankar Sanwalka said: "Statistics like this show the organised Indian retail sector is just starting to realise the massive potential which it obviously has. Retail businesses are becoming more sophisticated in their offerings and adjusting their growth targets accordingly."

He also pointed out: "Due to the high cost of retail space in the increasingly congested cities, retailers are welcoming the emergence of a mall culture. Such has been the zeal with which this format has been accepted that it is predicted that 68 million square feet of mall space will be available by the end of 2007."

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