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NEW DELHI
APRIL 9, 2007
IT revenue from the retail segment is expected to grow to $1.07 billion by
2010, with a compound annual growth rate (CAGR) of 44 percent, according to the
Report - 'India's Retail Industry: IT Market Trends and Opportunities,
2006-2010,' by Springboard Research.
In 2006 the IT revenue from retail sector measured $253 million. The Indian
retail industry, estimated at $325 billion in 2006, is one of the fastest
growing sectors of the Indian economy, Springboard said in a statement.
"As the current economic boom in India spreads to Tier II and Tier III
cities and towns, reaching out to prospective consumers in these cities is high
on the agenda of most retail companies," said Nilotpal Chakravarti, Market
Analyst for Springboard Research. "Retailers consider market presence in
these cities and towns key to their growth and profitability. As such, many
retail companies are investing in technology that will help support their
expansion into these new markets."
According to the report after real estate and human resources, IT is the
highest investment area for most large- and medium-sized retailers. Report data
also showed that retailers consider supply chain management (SCM) and inventory
management their top strategic focus areas.
This is driving the demand for enterprise resource planning (ERP) systems,
with 35 percent of the report's retail respondents saying that they have
deployed ERP as their largest IT solution in the past 24 months and a further 38
percent of retailers sharing that they will invest in ERP in the next 12 months,
a Springboard statement said.
"Many Indian retail firms have traditionally focused on service and
support as a key factor in choosing a vendor. We expect this to continue and to
also see more significance placed on an IT firm's industry knowledge,
expertise, and ability to provide retail-focused solutions," Chakravarti
explained.
The report also identified SAP as the leading primary influencer in terms of
solutions investments (27 percent of respondents), followed by Microsoft (14
percent). Local vendors (19 percent) also had a significant response.
The local vendors' focus on providing customized and industry-specific
retail solutions has helped them create a niche for themselves in the market,
Springboard statement added. Page(s) 1
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