India retains top slot as retail destination: study

Friday, 22 June 2007, 07:00 Hrs
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New Delhi: India with its billion-plus consumer market has once again snatched the number one slot as the most preferred destination for global retail investors in 2006-07, surpassing Russia and China, says a study released Thursday.

India has given rise to considerable amount of competition not only in larger metros but also in smaller cities and towns, said the study of retail investment attractiveness among 30 emerging markets conducted by consultancy firm A.T. Kearney.

According to it, India and Russia have retained their top two positions for the third consecutive year but China, which was ranked fifth in 2005-06, moved to the third spot largely on the strength of continued growth in consumer spending and retailers moving into smaller markets.

Modern retail formats such as shopping malls, supermarkets and hypermarkets grew in India by 25-30 percent, while in Russia and China the growth was 13 percent last year.

The study - Global Retail Development Index (GRDI) - also indicated the huge potential that lies in these emerging markets where the number of consumers is getting bigger by the day.

"India being at the top of the GRDI validates the level of activity and enthusiasm we have seen in the marketplace," Hemant Kalbag, principal, consumer industries and retail practice, A.T. Kearney India, said in a statement here.

"We anticipate seeing another year of major investments and new retail concepts changing the rapidly evolving organised retail landscape in India, not just in the metros but also deeper penetration in tier 2 and tier 3 cities," Kalbag added.

Besides India and China, other Asian countries like Vietnam, Malaysia and Thailand also showed the potential to attract retail investors from all round the world.

In India, shopping centre developer Prozone is focusing on smaller cities in anticipation of growing demand for modern retailer, the study noted.

"However, retailers should not go into second and third-tier cities armed with a first-tier strategy. Successfully entering a new country via smaller cities requires careful identification of cities with consumers who are ready to embrace modern retail formats," Kalbag stressed.

He said if the investors approach these markets with the right kind of strategy then smaller cities can be attractive targets for retailers.
Source: IANS
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