Indian retail is coming of age, things have changed dramatically in last decade.Mushrooming malls all across in India has created a desperately growing retail sector.

In any economy retail sector plays a big role in judging health of consumers spending power and consumer confidnece.  In US there is an index that measures consumer confidence and is widely watched by stock traders and economist .It is one of key barometer of economic state.

It is estimated that 70 million Indians in a population of about 1 billion now earn a salary of $18,000 a year, a figure that is set to rise to 140 million by 2011. Many of these people are looking for more choice in where to spend their new-found wealth.

The Indian retail sector is now worth about $250bn. But as we all know more then 93% of that is unorganizsed retail. The mom and pop shops and lalaji ki dukan. Indian govt has opened up retail sector in last few years for organized retailers and foreign retailers with some conditions.

And just like everything else in India we saw a plethora of indian companies starting their retail subsidiary. No surprise there. Every Indian company is conglomarate of unrelated businesses. If you buy Tata Stock , that itself is a mutual fund .. :)

Some key retailers .. Pantalloons, Shoppers stop, Trent ( TATA ) and list continues .

There has been very little in the way of mergers and acquisitions in retail space but it seems reasonable to assume that so many companies in the retail industry can't all remain in business specially when their is red ink. How long can they keep bleeding. Yes I know , many of these retailers are backed by big industry houses who have other sources of cash. There is nothing new there. I remember when mobile space got crowded and when pvt airline were allowed.   What is rational behind a petrochemical (RIL ) starting a food business .. I don't understand.

While the organized retailers market share will keep growing ,it won't always be this way. Companies will consolidate and sold before they become another Subhiksha. 

Million dollar question , who will survive and who will surrender ?

One could imagine that some larger, long established, tier 1 retailers would acquire some of the new, smaller, competitors that are significantly cutting into their market share. At the same time retailers backed by multinationals may try to spread their wings.