Retail sector in is in booming phase because of rise in consumption and disposable income of an Indian. India is the fifth largest retail market in the world and it is expanding with a very high growth rate. More than 6 million square feet of space has been added for retail mall in first six months of year 2011 (CB Richard Ellis India) and this is because of aggressive expansion of organized retail in India also according to CB Richard Ellis India estimates overall rental values across the malls have increased by 4% to 16% in the NCR region during the first half of this year. Some of the retail giants like Future group, Aditya Birla Group, Reliance retail, Shoppers Stop etc are eagerly foraying into untapped avenues of Indian markets by making huge investment plans.
Jubilant Foodworks Ltd. Which operates Domino’s Pizza in India will invest over Rs 70 Cr in the financial year 2012 on new stores. Reliance Retail is also planning to expand its business across the country by doubling the number of stores, Aditya Birla Retail with its brand ‘More’ is going to open 12 hypermarket and 150 supermarket in fiscal 2012, Shopper’s Stop also plans to open four more hypermarkets and ten departmental stores. Along with the metro cities retailer are also focusing on expanding their operations in tier2 and tier3 cities.
After globalization, liberalization and privatization Indian market have been affected on large extent due to this only both national and international retail players entered in the Indian retail market. And specially after the allowance of FDI in single brand retail by government.
Government has permitted 51% FDI in single brand retail till now which helped a lot in impeccable growth of retail sector in India, but now according to recent news, government of India is going to permit 100% FDI in retail sector in single brand retail which will allow more foreign retail players to open their retail stores in India and which will help in the growth of organized retail sector, though it also has been claimed that after allowing 100% FDI in retail sector small traders may lose their jobs because their products or services will not be able to compete with those foreign players. From customer’s perspective they also want more options and FDI will help in fulfilling the consumer’s desire when more foreign retail players will open their stores in India this will give them access to more choice and more value proposition.
Proximity to the consumers is the major competitive advantage to the unorganized retailers and this advantage includes consumer goodwill, credit sale, ability to sell loose items, convenient timing and bargaining power to consumers
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