Retailization in India ... domestic first movers

india-lf.gifA while ago I reported on the untapped potential for retailiazation in India. Back then we learned two important things. 1) that the retail market in India is huge but that there were notable obstacles for retailiazation and 2) that foreign outlets such as Tesco and Wal-mart do not have the possiblity to advance in India because of legislation banning FDI in the sector.

This obviously means that domestic players are claiming the market or at least trying to do so until the big international boys come along, if ever.

So reports The Guardian.  (Really a must read if you have been following this)

"Trooping through India in recent months have been Tesco's chief executive, Sir Terry Leahy, and Wal-Mart's international chief, John Menzer. Anders Dahlvig, Ikea's chief executive, says he has been looking "seriously" at the country for the past six months.

At present, western companies can do little but wait, visit and watch. Under Indian law, no foreign direct investment is allowed in the retail sector, except for single-brand stores such as Nike, Gap and Zara. All three are busy setting up operations.

The retail market potential is vast. India has the world's second-largest population and consumer market after China. Analysts say Delhi is following a similar trajectory - albeit somewhat more slowly - to that taken by Beijing. China first allowed direct foreign investment in 1992, limited then to six provinces.

"By 2000, China had virtually liberalised its retail market. Now, half of the top 70 global retailers are there," says Sanjay Verma, director at the property strategists, Cushman & Wakefield.

While China's ruling communists have opened the doors to foreign companies, India's left argues that multinational corporations will quickly establish a monopoly and force family businesses to close.

As the left is part of India's ruling coalition, Mr Verma says the country's laws will be relaxed only incrementally. "We have a very different political system in India, and it is going to take longer here. It's democracy at work".

The result is that Indian retailers, such as HyperCity, are expanding rapidly, opening more stores and experimenting with new formats, in a race to dig in before big foreign competitors are allowed a free hand. HyperCity, owned by the Raheja family whose 10bn-rupee (£116m) property empire gives them access to prime sites, has plans to open another 14 stores across India within 18 months. There is a mandate, says Mr Levermore, for another 40."


Off topic admin info ...

I am sorry if anybody was affected by the glicthes in my site last night. Obviously I was guilty of the problem myself and had to run crying to Squarespace's supporters who fixed the problem accordingly :).