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India ranked 20th on Retail Attractiveness Index
Posted On: 25-06-2014 22:35:17 PM

India has slipped to the 20th rank among the top 30 developing countries identified by consulting firm AT Kearney in its 2014 Global Retail Development Index (GRDI). In 2013 , India had stood at number 14.

The region saw several improvements in the rankings led by China which regained the No. 2 slot. Retail sales in China increased 13% in 2013 (to $3.7 trillion) Chile and China topped the company’s Retail Development Index ranking this year. Malaysia, at No. 9, re-entered the top 10 for the first time since 2009. Even as Indonesia moved up four places to 15 from last year’s ranking, India fell behind Sri Lanka ranked 18. In 2013, India had slipped nine spots to become number 14. Markets that showed promise of growth in retail included Latin America, Malaysia, the Middle East and Central Asia.

The GRDI analyses 25 macroeconomic and retail-specific variables to help retailers identify emerging market investment opportunities. GRDI scores are based on variables such as country and business risk, market attractiveness, market saturation and time pressure that is measured by annual growth rate of modern retail sales weighted by the general economic development of the country. Ratings for India dropped majorly due to lower GDP growth, high consumer price inflation, currency fluctuations and lack of clarity around FDI policies in multi-branded retail.

Still, India is expected to remain an appealing, long-term retail destination for several reasons, including its demographics—a population of 1.2 billion people, half of whom are younger than 30 and roughly one-third of whom live in cities. Indians’ disposable incomes are increasing, allowing them to spend more and try new products, brands, and categories while.

The report noted that most global retailers continued to push into developing markets with some notable exceptions such as Wal-Mart Stores Inc., which pruned its portfolio in China and Brazil, and Tesco that took a more cautious approach in China owing to flattening revenue growth and surging labour and rental costs. Another key finding of the report has been that the regional retailers are growing from strength to strength and becoming important players in emerging markets. They use their proximity as a competitive advantage to steal share in neighboring markets. Thailand’s Berli Jucker and SuperSports, Japan’s Nojima, Uniqlo and Takashimaya as well as South Korea’s Lotte Shopping are expanding in South East Asia and Singapore’s Charles & Keith plans to open stores in Sri Lanka. At the same time, major domestic chains including Store Corp. and GCH Retail in Malaysia and Matahari Putra Prima and developer Lippo Karawaci in Indonesia are keeping ahead of regional and global brands with their push into new cities.

Source: Economic Times


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