Wednesday, September 29, 2010

Shopping in India may eventually be familiar to Americans and Europeans

Not that I'm particularly an expert in this topic, but if I were to travel outside of my comfort zone in Ontario, California, I'd face the fact that the businesses in the place that I visited would probably be different from the ones at home. For example, if I were to go to India, I highly doubt that I'd run into an In N Out Burger. (For numerous reasons.)

But eventually, two well-known chains - one from the United States, the other from Europe - may end up in India:

India may decide in two to three months whether to allow companies including Wal-Mart Stores Inc. and Carrefour SA to open retail stores in Asia’s third-largest economy, an official said.

As the BusinessWeek article, an appearance by the U.S.-based Wal-Mart and the France-based Carrefour would have to overcome some current restrictions in Indian law:

Indian laws, aimed at protecting the interests of owners of small stores, limit overseas investment to single brand retail or wholesale outlets. Industry groups such as the Confederation of All Indian Traders oppose foreign investment in retail.

Right now, Wal-Mart is getting around this by working through an Indian partner, and has opened a grand total of two stores in the country.

But India is a desirable destination, according to the India Brand Equity Foundation:

The BMI India Retail Report for the third-quarter of 2010, forecasts that the total retail sales will grow from US$ 353 billion in 2010 to US$ 543.2 billion by 2014. With the expanding middle and upper class consumer base, there will also be opportunities in India's tier II and III cities. The greater availability of personal credit and a growing vehicle population to improve mobility also contribute to a trend towards annual retail sales growth of 11.4 per cent. Mass grocery retail (MGR) sales in India are forecast to undergo enormous growth over the forecast period. BMI further predicts that sales through MGR outlets will increase by 154 per cent to reach US$ 15.29 billion by 2014. This is a consequence of India's dramatic, rapid shift from small independent retailers to large, modern outlets.

So it appears that a shift is already happening. The question is how long it will take.
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