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> Tops A T Kearney’s list of emerging markets for global retailers.
> The second fastest growing economy
> The third largest economy in terms of GDP in next five years
> Among the top 10 FDI destinations
> Fastest-growing Asia-Pacific market for international tourist spending
> Economy growth is at 8 per cent – expected to exceed that of China by year 2015
> Expected to be the third largest economy after China and US by
year 2032 |
| OPPORTUNITY INDIA |
India: A Perfect Destination for Business Expansion
> A stable Government with second
stage reforms in place
> Well established corporate ethics
> Major tax reforms including implementation of VAT
Investments & Returns
> $130 billion-plus investment in infrastructure by year 2010
> $ 10 billion FDI in infrastructure development and capital market by year 2008
> Stock market rose by nearly 40 per cent in 2005; foreign investors are flooding in | |
A Resplendent Market
> Largest young population in the world – over 890 million people below 45 years of age
> More English-speaking people in India than in the whole of Europe put together
> 600 million-plus effective consumers by year 2010
> 550 million-plus people under the age of 20 by year 2015
> 70 million-plus people earn over Rs.8,00,000 ($18,000) a year – number to rise to 140 million by year 2011
| | Consumer Spend
Total Consumer Spend: Rs.20,00,000 crore ($445 billion) in the year 2005
Size of Retail: Rs.10,50,000 crore ($233 billion); double digit growth expected
Average pay hikes of 15 per cent-plus; consumption set to jump significantly
Organised Retail: Rs.35,000 crore ($8 billion); 30 per cent-plus annual growth so far (year 2005)
Scope for Organised Retail: Rs.2,00,000 crore ($45 billion) by year 2010
Leading retailers' sales growth (2005): 50-100 per cent |
Retail Space Growth
> 100 million sq.ft of quality shopping centre space
by 2007-08
> The above to generate retail sales of over Rs.50,000 crore ($11 billion)
> Rs.20,000 crore-plus ($4 billion-plus) investment in pipeline for retail infrastructure, systems and shopfits
> Space for 10,000-plus new outlets, 50 hypermarkets, 350 large department stores
> 10,000-plus small and big existing outlets to undergo complete facelifts
FDI and Global Retailers
> 51 per cent FDI allowed in single brand retailing
> FDI laws relatively liberal in wholesale trade
> Metro AG and Shoprite already operational
> More foreign retailers eyeing possibilities in wholesale
> Tesco, Carrefour and Wal-Mart expected to operate soon
> Woolworths (Dick Smith Electronics – durable retail arm) entering through a JV with the Tata conglomerate |
| The Retail Evolution
The last few years have seen rapid transformation in Indian retailing in many areas and the setting up of scalable and profitable retail models across categories. Indian consumers are rapidly evolving and accepting modern formats overwhelmingly.
With escalating consumerism, unprecedented awareness and a youth-heavy customer base,
India is the proverbial ‘Promised Land’ for global brands and retailers. A T Kearney’s ‘2005 Global Retail Development Index’ gives a clear message to global retailers on India: move now or forego prime locations and market positions that will be saturated quickly.
Global retailers that have missed out on capturing the first-mover advantages in China can make up for those losses in India. |
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| Plans of large Retailers |
RELIANCE RETAIL
Investing Rs.30,000 crore ($6.67 bn) in setting up multiple retail formats with expected sales of Rs.90,000 crore-plus ($20 bn) by 2009-10
PANTALOON RETAIL
Will occupy 10 mn sq.ft retail space and achieve Rs.9,000 crore-plus ($2 bn) sales by 2008
RPG
Planning IPO, will have 450-plus MusicWorld, 50-plus Spencer’s Hyper covering 4 mn sq.ft by 2010
LIFESTYLE
Investing Rs.400 crore-plus ($90 mn) in next five years on Max Hypermarkets & value retail stores, home and lifestyle centres
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RAHEJAS
Operates Shoppers’ Stop, Crossword, Inorbit Mall, and ‘Home Stop’ formats. Will operate 55 "Hypercity" hypermarkets with US$100 million sales across India by 2015
PIRAMYD RETAIL
Aiming to occupy 1.75 million sq.ft retail space through 150 stores in next five years
TATA (TRENT LTD.)
Trent to open 27 more stores across its retail formats adding 1 mn sq.ft of space in the next 12 DLF malls. Titan industries to add 50-plus Titan and Tanishq stores in 2006 |
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