Wednesday, June 27, 2012

' India Fifth most Attractive Retail Market '

Despite the recent flip-flops over enhancement of FDI cap in the retail sector, India has emerged as the fifth most favorable destination for international retailers, outpacing UAE, Russia, Indonesia and Saudi Arabia.

"India remains a high potential market with accelerated retail growth of 15-20% expected over the next five years. Growth is supported by strong macro economic conditions, including a 6-7% rise in GDP, higher disposable incomes, and rapid urbanization," said a recent report by global management consultancy firm A T Kearney.

The approval of 100% FDI in single brand retail, especially, will give a fillip to the sector in the country prompting several international retail chains to explore the market either on their own or through local partners, the report said.

Companies such as GAP, IKEA, Abercrombie & Fitch have already stepped up inquiries for an entry into the market, despite the rider of 30% local sourcing for single brand foreign retail chains.
  
According to the entity's Global Retail Development Index (GRDI) 2012, India ranks fifth after Brazil, Chile, China and Uruguay.

With the developed markets witnessing an economic turmoil, emerging countries are fast becoming the retail hotspot for foreign brands, with most of them seeing faster growth here compared to their home markets.

In the past five years, retail chain giants like Walmart, Tesco, Metro Group, saw revenues in developing countries grow 2.5 times faster than their home markets, the report said.

Even in the food and beverage industry, India is fast becoming an important investment destination for foreign players with companies like Starbucks which is planning to enter India this year and American brand Dunkin' Donuts which recently entered the country in partnership with local franchisee Jubilant FoodWorks.

The Times of India. June 27, 2012

Tuesday, June 26, 2012

IKEA Plans Entry into India

Swedish homeware company Ikea has announced its plans to invest Euro 1.5 billion in India for setting up 25 retail stores as wholly-owned subsidiaries following months of clarificatory discussion with the government on the compulsory clause of domestic sourcing of inputs from local small companies.
A formal proposal was submitted to the foreign investment promotion board or FIPB on Friday requesting it to grant approval to Ikea India to hold 100% FDI in 25 stores across the country. The proposed investment in the stores would be to the tune of Euro 600 million in the first stage and Euro 900 million in the second stage.

 Source : Economic Times

Sunday, June 24, 2012

Hariyali Bazaar downing Shutters

Reliable sources inform that the largest retailer in rural India is shutting shop. The 300 plus store chain is owned by the DCM Shriram Consolidated Ltd group whose chairman is Ajay Shriram. 
Hariyali has been operation for the last 9 years in rural India and each store is stocked with the categories of Agri products, Food and Groceries, Household goods including white goods and electronics and Lifestyle products such as apparel and footwear.
The chain operates under 2 formats - the larger Centers which were built on plot sizes of 2-5 Acres with a built up area of around 10000 sq ft. and the smaller Stores with an area of 1500 to 5000 sq ft. The larger centers are owned by the company and many of these have  a petrol pump as well as LPG to offer. 
The process of issuing notices to staff  has already begun and liquidation of stocks is well underway.
It is believed that mismanagement, location of the stores and lack of transparency ( particularly in the last 2 years ) led to this downfall.

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