India tops the Global Retail Development Index, thanks to a more favorable foreign investment environment, strong economic growth and a consumption boom. India’s GDP is forecast to grow 7.6 percent in 2018, which is helping boost the middle class and increase consumer spending beyond the essentials. These trends are expected to help organized retail double in size by 2020. India’s retail market is expected to grow at a Compound Annual Growth Rate (CAGR) of 10 percent to US$ 1.6 trillion by 2026 from US$ 641 billion in 2016.
Some Interesting Facts:
- Indian E-commerce sales are expected to reach US$ 120 billion by 2020 from US$ 30 billion in FY 2016, which projections may further increase due to the increased e-commerce transactional activity on mobile phones, after India’s implementation of demonetization and push for electronic payments throughout all demographic classes within India.
- India’s E-commerce market is expected to reach US$ 220 billion in terms of gross merchandise value (GMV) and 530 million shoppers by 2025.
- Modern organized retail, with a market penetration of only 5%, is expected to grow about six times from the current 27 billion USD to 220 billion USD, across all categories and segments in next 8 years.
We consider retailing as an environment rather than a platform for business. We understand the varied physical and psychological drivers behind a retail business decision and help our clients make the right decision – whether they’re evaluating entry into India or an investment opportunity.
Cross Border Retail Challenges
- Foreign Direct Investment (FDI) Restrictions and Rules in India
- Supply Chain / Logistical Management Issues in India
- Strategic Market Assessment / Lack of Local Market Intelligence / Transparency
- Retail Business Formats and Strategies, Including India Organized v Unorganized Sectors
- Effective Marketing Strategy / Region Customization
- India Retail Employment Challenges
- Strategic Market Entry Approach / India – U.S. Cultural and Regional Factorial Analysis
- Cross-Cultural Deal-Making Custom and Practice in the U.S. v. India, Including Negotiation Protocols and “Do’s” and “Don’t’s”
- Finding, Properly Vetting and Entering into Local Partner, Joint Venture or Other Business Alliance Arrangements
- Govermental Approvals and Requirements
- India / U.S. Business Entity Formation, Licensing and Permitting
- Local Legal Issues, Including Deal Structure and Documentation, Labor Law Compliance, Leasing, Zoning, Deal Structure and Documentation
- International Tax Issues, Including Tax Efficient Deal Strucuring, Withholding, Tax Treaty Planning & Benefits, Tax Deferral Strategies, Etc.
Services provided by India Global Advisors for the Retail Sector:
- Market Research and Assessment– Assist in evaluating local markets and opportunities, including current trends and mid to long term opportunities and trends, and assess local competitors.
- Market Entry Strategies –Based on the market data obtained and interpretative results, our advisors can assist in the formulation of market entry strategies, including the feasibility of an “All – India” strategy versus a regional focus, the engagement of local joint venture partners, wholesaler, distributor or other local alliances, and related business, legal and tax strategies in conjunction with local expertise partners.
- Local Alliance / Joint Venture Engagement –Depending on your market entry strategy, our advisors can assist you in finding the right local business alliance, including sourcing, preliminary interviews and vetting, negotiations and ultimate engagement.
- Deal Structuring- Working with our local and international legal and tax advisory teams, we assist you in achieving optimal investment returns through strategic, business, legal and tax-efficient structures.
- Marketing Strategy-Based on India’s population of over 1.3 billion people and its diverse cultural, demographic and language differences, an “All India” marketing strategy may not always be the recommended option., A regional marketing based strategy is often pursued by successful retailors. Our team of regional marketing experts can assist you in developing these strategies, closely working with your brand and local India business partners.
Retail Success Stories:
 AT Kearney report- https://www.atkearney.com/global-retail-development-index/article?/a/the-age-of-focus-2017-full-study
 IBEF report- https://www.ibef.org/industry/retail-india.aspx