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Organized Retail Industry – India

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Organised Retail Industry – India

Indian organised retail market is only about 8% of the total domestic retail market. It is expected that this sector will grow to about 20% in the next 8 to 10 years. This is a huge opportunity area for any company with a good financial capacity and market knowledge.

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Major portion of the existing market share is with Indian companies with a few Joint Ventures of global giants. FDI policies of India have not been very conducive to the entry of global retailers like TESCO & Wal-Mart. While the current government has increased FDI investment to 51%, it has also put in conditions of minimum $100 million investment and split of investment in front & backend operations. Main political opposition parties have made their intentions clear on reversing trends in FDI, if they gain power in upcoming elections.

On a very broad level, PESTEL & five forces analysis will indicate that the global giants will need strong local partner to enter the Indian organised retail market to offset policy restrictions and political uncertainties.

Strength of these global giants have evolved best practises in major work processes and logistics design for managing a wide spread retail business.

In conclusion:

Best strategy is to leverage the strengths of global giants and build a business that has inherent competitive advantage. Such collaborative ventures will be successful in future even if there is change in policies of FDI in organized retail market, as the business process knowledge gained from global giants will sustain the business growth.

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