Edevelop
ELITE MEMBER
- Joined
- Feb 2, 2007
- Messages
- 14,735
- Reaction score
- 23
- Country
- Location
NEW DELHI: India has fallen to 14th position as the most attractive destination for global retailers, underperforming smaller markets such as Turkey, Kazakhstan and Armenia, according to global consulting firm AT Kearney.
AT Kearney's Global Retail Development Index (GRDI), which ranks 30 emerging countries based on a set of 25 variables including economic and political risk and market attractiveness and saturation levels, dropped India nine positions from last year when it ranked fifth. In fact, the Indian market was the most attractive destination five years ago and had consistently occupied one of the top five slots in the last decade.
"The cost of doing business in India because of corruption has significantly deteriorated over the past twelve months. While nobody can ignore India, it's not easy to get their business model translate into profits even after many years," says Debashish Mukherjee, partner, AT Kearney. This is despite the government allowing 100% FDI in single brand for the first time.
Several single-branded retailers entered India in many sectors: apparel and beauty (including Brooks Brothers, Kenneth Cole, Sephora, and Armani Junior), standalone boutiques (including Roberto Cavalli and Christian Louboutin), and food (including Starbucks and Dunkin' Donuts). Large retailers such as IKEA too are finalising their India entry strategies.
Even in multi-brand retail, the government allowed 51% FDI starting early 2013 though with riders about investment, sourcing, store locations, and state government approval. Yet, multi-brand players are taking a "wait-and-see" approach due to apprehensions about how the policy will be implemented. "Even if we have the most positive policy now, there is political uncertainty which has affected the ranking," adds Mukherjee...
India's GDP growth rate slipped to 5%, down from a 10-year average of 7.8%. Same-store sales volume growth slowed in 2012 across retail, particularly for lifestyle and value-based formats.
India falls to 14th on the most attractive destination for global retailers list - The Economic Times
AT Kearney's Global Retail Development Index (GRDI), which ranks 30 emerging countries based on a set of 25 variables including economic and political risk and market attractiveness and saturation levels, dropped India nine positions from last year when it ranked fifth. In fact, the Indian market was the most attractive destination five years ago and had consistently occupied one of the top five slots in the last decade.
"The cost of doing business in India because of corruption has significantly deteriorated over the past twelve months. While nobody can ignore India, it's not easy to get their business model translate into profits even after many years," says Debashish Mukherjee, partner, AT Kearney. This is despite the government allowing 100% FDI in single brand for the first time.
Several single-branded retailers entered India in many sectors: apparel and beauty (including Brooks Brothers, Kenneth Cole, Sephora, and Armani Junior), standalone boutiques (including Roberto Cavalli and Christian Louboutin), and food (including Starbucks and Dunkin' Donuts). Large retailers such as IKEA too are finalising their India entry strategies.
Even in multi-brand retail, the government allowed 51% FDI starting early 2013 though with riders about investment, sourcing, store locations, and state government approval. Yet, multi-brand players are taking a "wait-and-see" approach due to apprehensions about how the policy will be implemented. "Even if we have the most positive policy now, there is political uncertainty which has affected the ranking," adds Mukherjee...
India's GDP growth rate slipped to 5%, down from a 10-year average of 7.8%. Same-store sales volume growth slowed in 2012 across retail, particularly for lifestyle and value-based formats.
India falls to 14th on the most attractive destination for global retailers list - The Economic Times
