More than 50 mid-sized global retailers are planning to enter the Indian market in the next six months, investing $300-500 million to open around 3,000 stores. This expansion is driven by India's growing economy, consumption, urbanization and middle class. Many of the incoming brands are in the food and beverage, apparel, and education sectors. The relaxed FDI policies and implementation of GST are further fueling growth in the Indian retail market. Selecting the right entry strategy is key for global brands to succeed in India given its large population and regional complexities.

1. wwww.digitalerra.com
All Eyes on India For Global Retail Expansion
More than 50 mid-rung global retailers are planning to enter India within the
next six months, according to data compiled by Franchise India that has tied
up with them for their launches, with their eye mostly on smaller, untapped
markets within the country.
#DigitalErra Thought Corner
Brands such as Korres, Migato, Evisu, Wallstreet English, Pasta Mania, Lush
Addiction, Melting Pot, Yogurt Lab and Monnalisa, many from the US and
Singapore, will invest about $300-500 million — all told to open roughly
3,000 stores, triggered by the country’s expanding economy, booming
consumption, urbanising population and growing middle class.
“The first retail wave happened a decade ago when bigger retailers and
brands entered India,” said Gaurav Marya, chairman of Franchise India

2. wwww.digitalerra.com
Holdings, a retail solutions provider that is helping these 53 brands find
partners and get regulatory clearances. “Now, it’s the turn of small and mid-
sized brands as they look to cash in on the open retail policy and huge gap
in the market for branded products.”
Of the incoming brands, 18 are in food and beverage space followed by 13
each in apparel and lifestyle products and education products.
(Source: ET)
Earlier this month, India replaced China as the most promising retail market
in the world, according to an AT Kearney report.
“Government efforts to boost cashless payments and reform indirect
taxation with a nationwide goods and services tax are also expected to
accelerate adoption of modern retail,” the AT Kearney report
added. (Source: newindianexpress.com)

3. wwww.digitalerra.com
Relaxed FDI Rules
GST, one of India’s most significant tax reforms in decades, is set to be
rolled out on July 1.
The government’s decision to relax FDI regulations in key areas of the retail
sector has provided further boost to its growth. The government has allowed
100 per cent foreign ownership in business-to-business e-commerce
businesses and for retailers that sell food products.
H&M has opened 15 stores within two years of entering the Indian market,
mobile handset maker 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.

4. wwww.digitalerra.com
Also, IKEA, the world’s largest furniture retailer, plans to invest $1.56 billion
to set up 25 stores across India. Amazon and Walmart have aggressive
rollout plans, with Walmart aiming to open 50 cash-and-carry stores in the
next 4-5 years.
Besides, Saks Fifth Avenue is in discussion talks with local partners to open
two stores.
“India is a fast-growing market, huge in size, but Monnalisa’s target is
concentrated in Tier 2 and 3 cities, allowing us to more easily reach our final
users,” said Thomas Bessi, overseas sales manager, Monnalisa SpA, a
European children’s wear retailer.
Opportunity in Global Food Chains
The Indian retail market was worth $641 billion in 2016 and is expected to
reach $1.6 trillion by 2026, growing at a compounded annual growth rate of
10%, according to the India Business of Fashion 2017 report.
With food and grocery retail just 3% of the overall market, several global
food chains sense an opportunity. The 18 QSRs, mostly snacking and ice-
cream brands, will enter a market still dominated by Domino’s Pizza and
McDonald’s, although the segment hasn’t been doing all that well of late.
Ecommerce & Mobile First Customer
This year’s A.T. Kearney’s study titled “The Age of Focus,” includes a special
section about the rise of mobile shopping and its impact on global retail

5. wwww.digitalerra.com
expansion. In many developing markets, mobile retail is the primary form of
online shopping.
“Mobile shopping is challenging the ways retailers think about global
expansion, as well as about their role in the value chain,” says Mike
Moriarty, an A.T. Kearney partner and co-author of the study. “We are
expecting more retailers to use mobile as part of their future expansions
plans.”
Also, Indian retail has benefited from the rapid growth in e-commerce.
Retailers have been quick to seize the opportunity with 86 per cent of e-
commerce dominated by pure-play online retailers in 2016.
America First and Brexit
Global retailers facing high uncertainty amid a changing geopolitical
environment and increasing nationalist sentiments expressed by Brexit and
America First. Faced with intensifying competition from local and regional
retailers that have grown increasingly more sophisticated, and advancements
in retail technology and e-commerce, retailers are being forced to pause and
rethink their strategies.
As a result, the past year has seen fewer retailers entering new markets or
expanding within existing markets, as well as many retailers examining their
footprints and logistics network to reduce store counts or exit markets
altogether.
Conclusion

6. wwww.digitalerra.com
India’s strong GDP growth and growing middle class coupled with a more
favorable regulatory environment over the past few years have played
significant roles in attaining this ranking. Consumer confidence is higher
than in the other BRIC countries and the economic participation of women,
as well as their digital connectivity, is rising steeply.
However, selecting the best entry strategy for global brands can be
challenging.
“Understanding the size and complexity of India’s retail market, especially
the dynamics at the state level, as well as the nuances across the nation
(with a population of 1.33 billion) is vital if retailers are to succeed,”
Himanshu Bajaj, partner with Consumer Industries & Retail Products Practice
at A.T. Kearney India, added.
While it is critical to select a properly vetted model that fits their expansion
strategy, many brands change the model over time to adapt to new
circumstances. In India, as in any other market, infrastructure is truly
fundamental to any successful retail introduction strategy.