Despite policy uncertainties, global retailers are still bullish about the Indian market, said Rachna Nath, Executive Director, India Leader for Retail and Consumer, PricewaterhouseCoopers.
With the economies of developed markets witnessing turmoil, “Over 50 per cent of retail CEOs we spoke to, for our annual global survey, believe the emerging markets, especially India, are their best bet,” said Nath, releasing a report on emerging trends in retail at a FICCI seminar.
There is a lot of anticipation and indecisiveness around FDI in multi-brand retail. But there is no real reason for fear. It is not just the
According to the report, the Indian retail industry is pegged at $500 billion and is expected to reach $1.3 trillion by 2020. Organised retail accounts for just 5 per cent of this today; it will reach 25 per cent by 2020.
Role of E-commerce
E-commerce will play a significant role in the coming years. “Right now, players are bleeding, but they are in it for the long game.”
Value retailers are increasingly becoming important. The report cites the example of Landmark Group-owned Max which has proven that fashion need not be expensive. “While higher income has pushed the retail sector on the growth path, consumers are thinking twice about spending as they seek value in what they buy,” said Nath.
There may be possible de-growth too, cautions Nath. “Inefficient stores may close down. But de-growth is a critical part of consolidation.”
British Deputy High Commissioner Mike Nithavrianakis said the UK is keenly awaiting the Indian retail sector to open up. “Pavers England and Swedish firm Ikea have shown interest in 100 per cent FDI in single brand retail; several other global players are closely looking at the Indian market.”
T. Krishnakumar, CEO, Hindustan Coca-Cola Beverages, urged retailers to exploit opportunities in tier 2 and 3 towns. “The emerging middle class in these towns wants the same things the urban consumer wants. Retailers must improve supply chain capability to serve them.”