India is world’s ‘most sought-after’ retail market, concludes survey of global retailers

New Delhi, April 15, 2008: In a recent survey, 300 global retailers, representing a global portfolio of around 25,000 stores, who are looking to expand outside their domestic markets, have identified India as the most sought-after retail destination, reports www.indiaretailbiz.com.

The survey was conducted by London-based C B Richard Ellis, a leading real estate services firm, to get latest insight into retailer attitudes towards the world's emerging retail destinations. The report indicates that 40% of the surveyed retailers consider emerging markets to provide their main source of growth over the next five years. India is considered particularly attractive because of the size of its market compared to its low presence of international retailers.

'With foreign ownership rules being gradually relaxed, foreign investment is also now possible, allowing single-brand retailers to own up to 51% of their India operations,' notes the report. Ukraine, Russia, Malaysia and Turkey followed India in this ranking. 27% of the surveyed retailers opened their first store in India last year or are planning to do so soon, the respective percentages for these countries were 24, 22, 19, and 15. Neighbouring China and Pakistan were ranked 8th (11%) and 11th (6%) on the list.

Among the factors influencing entry in the emerging markets, 56% consider availability of suitable property, compared to 46% in developed markets. Additionally, the presence of a franchise or local partner is another key consideration, as this can help foster rapid market penetration, says the report.
“Rising interest and growing expansion into emerging markets globally is being fuelled by rapid growth in consumer spending and the 'emerging middle class' in many of these countries. We believe India will maintain its position as a popular new location for retail expansion as further trade restrictions are lifted," says Peter Gold, Head of Cross Border Retail, CB Richard Ellis.

Wine Sales through Retail Destinations

The survey holds a lot of significance for further expansion of the Indian wine industry and the value-for-money low-priced foreign wines. With growing liberalisation in various states in allowing the sale of wine and beer through retail, this segment offers excellent growth potential.

Foreign wine companies are getting geared to the changing phenomenon. Next month a group of various Italian wine co-operatives which are popular and powerful in the supermarket wine section, is coming to India as a part of the delegation to meet among other importers, the potential retailers to look at the possibilities of long term collaboration.

Says Rajeev Samant, CEO of Sula Vineyards, "There's no doubt that this is one of the most exciting frontiers for ‘Modern Retail’. It would be even more exciting, however, if the Centre did away with its rule restricting FDI only to single-brand retail. If that happens, the subsequent retail boom will be one of the largest the world has seen, and would create huge employment and opportunity."

Dharti Desai, CEO of Mumbai based import firm FineWinesNMore is equally optimistic. She says, "I believe India will be the next big subscriber to more direct channels like aesthetically appealing wine outlets in big retail stores-such as Nature's Basket from Godrej in Mumbai. Indian consumers are hungry for an education that caters to their aspirational lifestyle which these attractive retail stores could provide too."

Source – Indian Wine Academy