`The Chinese market becomes increasingly saturated’
New Delhi , April 27
India has emerged as the most attractive destination for mass merchant and food retailers, outperforming China for the second year in a row, according to global consulting firm A T Kearney.
A T Kearney’s Global Retail Development Index (GRDI), which ranks 30 emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness and retail saturation levels, has retained India’s position at the top.
"The Indian retail market is gradually but surely opening up, while China’s market becomes increasingly saturated," said Mr Fadi Farra, a Principal in A T Kearney’s Consumer Industries and Retail Practice and leader of the Global Retail Development Index study.
The report said that the Indian Government had been tentative in its moves to open up the retail sector to Foreign Direct Investment (FDI). On the permission to allow FDI up to 51 per cent in single-brand retail, the report said: "This has triggered market-entry announcements from some retailers and has signalled to international retailers that India is serious about opening up the sector."
"India is at the peak of attractiveness for retailers right now, with a $350-billion retail market expected to grow 13 per cent this year," said Mr Raman Mangalorkar, Head of Consumer and Retail Practice in India for A T Kearney.
Commenting on the opportunities in this sector, he added that the organised retailers together account for less than three per cent of the modern retail market. On new entrants, the report mentioned Wal-Mart’s intentions of opening an Indian office for market research, and noted Tesco’s entry into the market through a partnership with Home Care Retail Mart Pvt Ltd, by launching a hypermarket format called Magnet.
China, by contrast, was showing signs of saturation, fuelled by the growth of international retailers, the report pointed out.
AT Kearney said Asia had dislodged Eastern Europe as the most attractive region. "The learning is that timing is the most important source of competitive advantage for global and regional retailers in the globalisation race," it said.