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    ‘Emerging markets more compelling for global retailers’


    Considering that success in developed retail markets has become more challenging, large global retailers are increasingly being compelled to look at the emerging markets to pursue their growth ambitions. This has been revealed in a recent report by (DTTL).

    The report, titled “2011 Global Powers of Retailing”, also says that India might still be out of reach, but it is clearly not out of sight of global retailer. “While there are signs that the Indian retail sector may open up FDI in multi-brand retail in the next few years, global retailers should be prepared to make significant investments for the long term, particularly in upgrading the back-end infrastructure and supply chain and in helping to convince local suppliers and vendors that they are here to stay and build a following among consumers,” said , senior director, Deloitte in India.

    He further said, “The experiences of some global players already in India have taught the industry valuable lessons, most notably that it is not sufficient simply to enter a promising market; there has to be a cohesive and holistic given the diversity in Indian shoppers and their unique shopping habits. It is also important that global retailers make the most of local knowledge: understanding local tastes and culture, using mostly local managerial talent, and developing local relationships with vendors, suppliers and service providers.”

    The report also says that the efforts of many global retail companies to cut costs and adjust their inventory levels have paid off, with net profit across the top 250 global retailers increasing from 2.4 per cent in 2008 to 3.1 percent in FY09. Global retailers are, thus, again looking at investing beyond their home markets as indicated by the fact that the global retail sector saw 38 retailers begin operations in a new country for the first time, with a combined total of 57 new market entries involving 42 countries.

    How soon India figures on this list would critically depend on the pace of FDI liberalisation in the Indian retail sector and the developments in this regard are being keenly tracked by many large global retailers.

    – IndiaRetailing Bureau