By Priya Nigam
I keep reading about the high inflation rate India is reeling under. Does that really stop us from some well deserved “retail therapy”? No, not really.
Over the past decade, India has pulled up its socks and decided to make its presence felt in the global economy. This is not only in terms of outsourcing and exports, but also consumption. We have certainly taken steps in the right direction over the last ten years and the resultant high economic growth rates have boosted the middle class and our spending power. Income has more than doubled in the last 20 years. With that, India has become the retailer’s dream come true! India is a huge and lucrative market. Around 72 million cell phones and 10 million automobiles are estimated to have been sold in the country last year. Now there is talk of the iPhone (8GB version) being launched at a price of up to Rs28,000. If you consider that too high for the Indian market, think again. We are already buying the much-hyped, touch screen device from the gray market for around that price!
According to DNA Money, an industry survey indicates that India’s retail business would continue to grow over the next five years, despite the global consumer slowdown. In fact, the survey conducted by retail consultancy firm Technopak shows that the Indian retail sector could attract an investment of $30 billion over the next five years, with about 50% of this going into the top eight cities of the country. And this figure does not include investments in malls and other ancillary industries. This investment could come from both foreign direct investments (FDIs) and investments from domestic majors.
UK-based Marks and Spencer has entered into a 51:49 joint venture with Reliance Retail, headed by Mukesh Ambani. The British chain store plans to invest £29 million to set up 50 or more stores across India over the next five years. The Wall Street Journal’s Mint quoted Marks and Spencer CEO Stuart Rose as saying that “the biggest opportunities we see are in India.” Meanwhile, Bharti Enterprises plans to spend up to $2.5 billion on its retail venture by 2015. Earlier this week, the company, which is a wholly-owned subsidiary of the Bharti Group, launched its first food and grocery store (called Easy Day) in Ludhiana.
Earlier this month, Aditya Birla’s retail arm, Aditya Birla Retail Ltd (ABRL), unveiled its plans to add around ten hypermarkets across India this year. This expansion plan involves an investment of Rs250 crore. The company also aims at launching several superstores under the “More” brand name.
In AT Kearney's annual Global Retail Development Index (GRDI), India has maintained its position as the most attractive market for retail investment for the third consecutive year. So, we are sure to hear about more investments pouring into the retail sector in the near future.
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