Why India, why now?
- The world’s largest unexploited retail market, recognised as the leading destination for retail investment in the 2006 Global Retail Development Index
- Organised retail still only accounts for less than 4% of the overall sector. This is expected to grow by more than 400% to $30bn by 2008, taking 8% – 9% of the retail sector as a whole.
- Rapid development of real estate
- FDI of up to 51% is now permitted in an Indian company operating in the retail sector under a single brand.
- Overseas retailers are also able to operate via franchise and strategic licensing agreements as well as wholesale operators.
- One quarter of the world’s youth live in India. More than 50% of the Indian population is below 25 years of age.
- By 2050, India will have overtaken China as the world’s most populous nation.
- Growing consumer class and rising disposable incomes
- 209 million households across the country. Although only six million of these are classified as rich, a further 22% are regarded as the consuming classes. This figure is expected to rise to 32% by 2010
- Disposable incomes are expected to rise at an average of 8.5% per annum until 2015
- Availability of cheap credit is increasing
- One of the world’s fastest growing economies; 3rd largest country in the world in PPP terms
- GDP has more than doubled in the last ten years
Rising disposable incomes, cheap consumer credit, highly attractive demographics, a booming economy and an increasingly liberal regulatory environment. No wonder, retailers globally are getting serious about India. Though the prize may be great the road is still a tough one. From understanding local tastes and tailoring the product offering, to securing access to the right real estate, entrants to the world's largest untapped retail market face some difficult challenges.
As one of the leading service providers to the Indian retail industry, Ernst & Young offers existing and new retailers an array of risk, tax, advisory and transaction services. We have been associated with the industry since its early growth phase in India and have worked with players across categories, formats and scale of operations. Our knowledge and experience acquired from our industry focus can help you address your most complex business challenges.
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