GLOBAL RETAILERS TARGET INDIAN MARKETS
An improved investment climate and a more liberal FDI regime have made India the top destination for global retail giants which are looking to expand overseas.The size of the Indian market is such that anybody in the mass market area will definitely be attracted to this country. Also the booming Indian economy has fuelled the growth of disposable income in the country, complimented by the Indian middle class which is getting younger (a huge of Indians being less than 18 years of age), providing a younger consumer class. Retail is on a roll in India.
Encouraged by favorable entry regulations and Indiaâ€™s economic takeoff, global retail players have made it clear that they want to enter this industry and strike while the Iron is hot. Local retailers too, have realized that they must shape up or ship out. But while the goingâ€™s getting really good for India Inc., the current scenario is just the tip of the iceberg, given the predictions for the future.
With Government regulations and laws getting set to fuel what can now be safely called â€˜The Great Indian retail explosionâ€™, it is of little surprise that global retail giants want a slice of the pie.
With organized retail exploding, one would imagine that the unorganized mom-and-pop stores would be forced to think of an alternative line of business. But against popular belief, the unorganized sector will not fade from prominence, with the entry of organized formats. It might alter its shape and form, but would definitely grow and remain a dominant contributor to the larger picture.
More and more old-format retailers will also organize themselves and present a look to the customer, which will combine the attractiveness of the new formats while retaining the warmth of the old formats. Roadside typical grocery shops will not disappear, but might reinvent themselves to create a better customer experience.
Retail is currently enjoying its sunrise status, but the market dynamics are set to change drastically in the near future. As retail formats mature across the country, it will be imperative for retailers to brand themselves for competitive advantage and as employers. On the business front, innovation and customer service will be the prime differentiators. Retailers who are flexible will be best able to continuously adapt their propositions to suit the market. But it will always be product and price that will get the consumer vote.
As far as attracting and retaining the right talent is concerned it all depends on whether retailers look at employees â€˜transactionalâ€™ or â€˜holisticallyâ€™. But ultimately, as in other industries , salary, prestige, fast-track growth opportunities and more success stories will help convince employees and perhaps more importantly, their families, of the attractiveness of a retail career.
Experts believe that smaller organizations will have to decide their own fate in the price and space wars that will eventually be waged on a much bigger scale. The entry of foreign players will widen the playing field and lead to more consolidation in the sector. In addition to this, one-stop stores are more likely to prosper, given the Indian customerâ€™s preference for browsing around and making impulsive purchases.
India is such a virgin territory with respect to develop retail that all formats will prosper. The unorganized formats still account for 97% of the market and will remain dominant. All eyes are firmly placed on the Indian retail space. One thing is sure: the competition is going to be fierce and only time will tell who gets the biggest slice of the pie.