Retail is predicted to be the next Boom sector in India after IT. It came changed the face of India and now retail is going to do just the same. The Indian customer is going to shop like never before and I as a normal MBA student foresee a lot of change in consumer behaviour in Retail with the FDI expanding its footprint in Indian Retail sector.
Retail Industry India –Quick Facts
- Retail accounts for 35% of the our GDP (Gross Domestic Product)
- Indian Retail ranked in the top 1-3 of GRDI (Global Retail Development Index) for the past 5 years
- Retail Industry accounts for around 8% of the country’s employment.
- Market size: US $312 Billion
Why the debate over FDI?
There is debate over FDI in retail sector (Multi-brand retail) primarily because Indian Govt. wants to protect the huge chunk of unorganized players (kirana stores/ mom & pop stores ). The negatives they foresee are:
- Low prices and high variety killing the business of local players
- High power of global companies to influence prices
- Suppliers’ margins could shrink considering bulk purchases from the manufacturing company directly
- Lopsided growth in cities- FDI Retail will focus only on target markets and leave out the towns
- The establishment of a DREAM Supply Chain- which will improve the efficiency of Indian retailers as well
- An opportunity for Indian manufacturers to reach global markets
- Indian consumer with growing disposable income has now more variety to choose from while deciding how to spend it
- A Joint Venture would be mutually beneficial for Indian as well as Foreign Investor
My Supposition: Save money for next few years and then shop like never before. FDI will be a very good move for the consumer as well as the economy.