The Indian Retail Market Keeps Getting BIGGER

Aditya Rao

The word Retail in India is limited to identify a shop that sells branded items at high rates. A customer will attribute the higher cost with the brand that he is buying. Few people ever see beyond this.

You can definitely expect that to change from 2008.Plans are underway for some of the world’s biggest retail stores to enter India. We did know that Wal-Mart is entering India in a huge way. Due to their lack of understanding of the Indian market structure and its complicated distribution system they have partnered with India’s Bharti group in order to gain an understanding.

Wal-Mart in India is a good thing for the abundant middle class simply because Wal-Mart is one store that has built its brand at selling standard quality products at lesser prices.

They will also challenge Reliance’s growing retail presence. Stores like Fresh and Big Bazaar will see huge competition once Wal- Mart enters and that’s music to the ears of the ordinary consumer.

Wal-Mart isn’t the only company in the offing. Reliance brokered a deal with Britain’s retail giant the Marks and Spencer group to set up stores in the country. Marks and Spencer too have been wary like Wal-Mart to step foot in India alone and have thus opted for a joint venture with Reliance.

Reliance on the other hand views this as another opportunity to stay ahead of everyone else. They hope to offset Wal-Mart’s impending Indian presence with the franchising of Marks and Spencer.

But there’s even more coming in the high end luxury goods market. Louis Vuitton and Versace have been hit hard by the current state of the US market. Their sales have suffered .So it should be no surprise that they have decided to enter the emerging markets of India and China in a big way. While their targeted customer is still someone who will pay for a luxury item, expect them to make bargains by selling some products at rates they usually don’t in an effort to attract the middle class man or woman.

Nothing can be more evident of India’s promise in the luxury retail sector than the announcement made this week by Italian giant Salvatore Ferragamo that they have achieved a major landmark by entering India through signing a deal with real estate giants DLF.

DLF has been on a massive expansion phase in India. They will be building more malls and multi storied buildings in the country than any other company. The most effective way that a company like Ferragamo that isn’t well known in India can garner some attention is by successfully running stores in malls simply because they contain an ample supply of their base consumer audience.

Ferragamo will open 3 stores this year in Bangalore, Delhi and Mumbai and are looking at adding seven more stores in the near future.

The biggest proof of India’s retail promise was seen earlier in the year when the Shopper’s Stop chain went in for a massive re-structuring program in order to maintain their sizeable prominence over the market.

That is a sign of things to come.