India tops AT Kearney's Global Retail Development Index

In terms of both size and momentum, Asia is the driving force behind global retail and the expansion of apparel, fashion, and luxury, branded food and beverage, personal care products.

Relaxed rules for foreign direct investment (FDI) in key sectors have improved the ease of doing business in India, says 2017 Global Retail Development Index report by AT Kearney.

Government efforts to boost cashless payments (witnessed in the recent nationwide demonetisation exercise) and reform indirect taxation with a nationwide goods and services tax (GST) are also expected to accelerate adoption of modern retail.

The report states that in 2016, consumers showed increased interest in brands, prominent international retailers entered the market, including Armani Exchange, Cole Haan, Heatwave, Muji, Massimo Dutti, Kate Spade, and Neil Barrett.

"H&M opened 15 stores within two years of entering the market, Xiaomi intends to roll out single-brand retail stores across the country, and German sports goods makers Puma and Adidas are looking for government approval to operate fully owned retail stores and online portals. IKEA, the world’s largest furniture retailer, plans to invest $1.56 billion to set up 25 stores nationwide. Amazon and Walmart have aggressive rollout plans, with Walmart aiming to open 50 cash-and-carry stores in the next four to five years. The luxury sector also continues to see activity with Saks Fifth Avenue reportedly in talks with local partners to open two stores," the report says.

Online retail is projected to grow 30 per cent annually and reach $48 billion by 2020, driven by high promotional activity and payment solutions such as cash on delivery. Lifestyle products such as apparel and shoes are among the most popular online categories. Lifestyle retailers such as Shoppers Stop are investing in omni-channel offerings to meet the demand for online. However, maintaining a profitable online operation is a challenge, and has led to some consolidation. Two of the nation’s largest online retailers, Flipkart and Snapdeal, are considering a merger as investors look to lock in returns, cut losses, and focus on sustainable growth, the report pointed out.

Fibre2Fashion News Desk – India