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A retail boom is sweeping across India. As talk of opening up of foreign direct investment gains momentum, will single brand retailers show the way? With the growth of malls, multiplexes, and hypermarkets, is consumer really the king? Indian retailing represents a huge business opportunity - for those planning to make new investments in modern, organised retailing as well as those looking at consolidation aimed at better economies of scale and value addition. The Rs 90,000 crore (a very conservative estimate) retail industry is growing prodigiously and has already shown that Indian middle class is on a shopping mania like it has never been before. Indian marketplace now boasts world's top brands and more are coming. Indian consumer now boasts a thickening wallet with disposable incomes growing all the time. Add to that easy consumer credit and you have all the makings of a retail boom. Consider the big names that are already in retail business in India and making big money: McDonald's, Pizza Hut, Dominos, Levi, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, and the Medicine Shoppe. With the government allowing 51 per cent FDI in single-brand retailing, some of these transnational giants - such as Nike, Nokia, and Levi -- will be looking at investing directly in retail operations in India. Though the multi-brand retailers like Wal-Mart and Carrefour cannot yet hold majority stakes in retail business in India, they can still tap some of the country's burgeoning market through partnerships with Indian players. Wal-Mart, the US-based $62.7 billion (Rs 2,82,150 crore) retail chain, for one, is testing water for a grand entry into Indian market. The company has already been sourcing about $1.5 billion worth of goods from the country. Dubai-based Landmark Group has opened it first 'Max Retail' outlet in India with 50 more stores in the pipeline. Marks and Spencer, the UK-based retail major, and Argyle Diamonds, a diamond producer and marketer, are other big names keen on India. Now consider the Indian biggies who have entered the fray or are about to make a foray. The Rs 80,000 crore Tata group has identified retail as one of its growth areas in the months and years to come. The group, which already operates Westside chain of retail stores as well as Stryde franchised stores for leather products, is reported to be ready to bring Woolworths brand of electronic stores to India. Woolworths is an Australian retail giant. Mukesh Ambani's Reliance group has reportedly identified 18 cities for setting up malls that will sell food, consumer electronics, textile, clothing, and every other thing that you can expect to find on a supermarket shelf. This is apart from the group's ongoing project to set up a chain of petrol stations with shops, restaurants and rest rooms. Mukesh's brother's Anil Dhirubhai Ambani Group (RADAG) is already a significant player in retail through Reliance Communications. The company now plans to venture into retail broadband. Pantaloon Retail (India), which ranks as one the country's top 5 retailers, is also expanding aggressively. It now has 16 Pantaloon stores, 21 Big Bazaar hypermarkets, 33 Food Bazaars, 3 Central malls in various nationwide locations. With retail boom much in evidence, the issues that are being pondered relate to its effects on consumers and on the survival of small shop owners and unorganized segment of the market. These issues must be examined in light of the fact that organised retailing still make up only 3-4 per cent of the total retail business. But the organised part of the business is growing at an exciting pace of 25-30 per cent per annum. It's also important to realise that this fantastic growth is both fuelling and is fuelled by an altogether new consumer experience that has combined shopping with entertainment. As big malls reshape consumer experience and expectations, it's easy to see why the big mall phenomenon is here to stay. The fears that the unroganised segments of the business would be wiped out by the organised one are exaggerated, industry watchers believe. There is more than enough room for the two segments to co-exist and grow, they point out. Also apparent are some of the benefits that big retailers will provide to consumers, such as discounts. The government's liberal attitude towards retail is also based on the projection that FDI in retail will result in backward linkages of production and manufacturing and spur domestic retailing as well as exports. Last but not the least, more organised retailing means more revenue for the government. On the face of it, it looks big malls could be a win-win situation for retailers, consumers, and the government.
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