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India ranks 39 as preferred destination for top retailers

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India ranks 39 on the list of the top 280 global retailers as a preferred destination to establish operations.

However, in the Asia-Pacific region, India ranked a little higher at 11, while the first and second slots were taken by China and Japan.

Mapping the global footprint of leading international retailers across 67 countries, the survey by global real estate service provider CB Richard Ellis indicates that the UK continues to be in the lead as Europe maintains its ability to attract the cream of international retail.

Despite the global economic slowdown, many retailers, especially cash-rich private companies, continued their expansion plans in the past 12 months. The survey saw retailers expand their international presence by an average of 12 per cent in the last year, being represented in two more countries than in the previous year. This was primarily driven by clothing, footwear and accessories retailers from Europe.

Interestingly, retailers have continued not just to internationalise, but to globalise – 40 per cent of all new store openings in 2008 were outside the retailer’s home region.

Emerging markets have been the primary beneficiaries of the retailer expansion activity, with the West Asian , Asian and Eastern European countries dominating the list of new openings. Two common drivers of the trend appeared to be rising local consumer affluence and opening of major shopping centres.

Mr Anshuman Magazine, Chairman and Managing Director, CB Richard Ellis, said since the last survey done a year ago, India has moved from the 44th position to the 39th position. This does not justify the size of our economy.

Even China has moved to the sixth position globally from 10 last year. India’s ranking among the Asia Pacific countries too is at 11, behind smaller countries such as Singapore and Indonesia. This ranking is not only because FDI in retail is not allowed but also due to relatively lower purchasing power, cost and availability of real estate, besides infrastructure and supply chain management issues.

The UK outperformed other major European economies with 58 per cent of retailers surveyed present there. Though Europe continues to dominate the top markets, emerging economies such as China, Russia and the UAE had gained ground in the last 12 months.

China, Russia and Japan performed well in 2008, ranking six, seven and 14 respectively. West Asian Middle Eastern countries also saw a marked increase in retailers entering the region. The UAE jumped two places in the ranking, from six in 2007 to fourth in 2008, with 45 per cent of international retailers present, compared to 39 per cent in 2007. Saudi Arabia moved up from the 28th position in 2007 to 15 in 2008, with the presence of 37 per cent of international brands.

LUXURY DOMINATES

Despite being one of the largest and most established retail markets, the US ranked 10 globally, with the presence of 39 per cent of international retailers. This could be attributed to some extent to the size and strength of its domestic market as US retailers tend to penetrate their vast national market extensively before considering international expansion. Canada made the strongest rise in the global ranking, moving to 13 from 18, with 37 per cent international retailers present.

The survey found luxury retailers dominate global retail in terms of their footprint around the world. Ninety per cent of them have a presence in over than 10 markets and 40 per cent are present in more than 30 countries.

Source: Business Line

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