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India’s robust macro- and microeconomic fundamentals, such as robust GDP growth, higher incomes, increasing personal consumption, favourable demographics and supportive government policies, will accelerate the growth of the retail sector.

As outlined in the PricewaterhouseCoopers thought leadership study entitled Building to Win: How multinationals are structuring to compete in emerging markets, most global retailers, especially in the current economic environment, are looking at India and China to grow, to shore up revenues and to access new customers. India’s retail sector is perhaps one of the most challenging, dynamic and exciting markets to operate in, as based on our discussions with retailers—

  • Serving a heterogeneous market (CUSTOMERS) - India is characterised by varying consumer tastes, preferences and buying habits. India’s states have unique languages, cuisine, geography, etc. and many retailers believe that consumers’ tastes and preferences vary by state, city, catchment area and even by street! This makes it seem that India is a collection of 28 countries instead of 28 states!

  • Developing a long-term investment horizon (INVESTMENT) - Domestic and global retailers view India as a long-term investment proposition and suggest that patience, deep pockets and customisation of products and services are required for success.

  • Focusing on innovation, customisation and new product development (PRODUCTS) - Global retailers are, through the launch of India - inspired products, positioning themselves as international retailers who understand the nuances of serving Indian customers in terms of offering them the right product, at the right price and through the right distribution channel.

  • Operating within the current regulatory framework (BUSINESS ENVIRONMENT) - Global retailers should realise that international strategies may not always be the best for the Indian market; some amount of customisation may be required to succeed in the Indian marketplace. Retailers need to comply with national- and state-level legislation, tax issues and regulatory frameworks.

Selected trends

  • Improving operational effectiveness

  • Focusing on innovation

  • Sophisticated consumers

  • Embarking upon a green agenda

Key challenges

  • Infrastructure

  • Workforce management

  • Value-conscious consumers

  • Supply chain

Strategic Issues for Retail CEOs* : Perspectives on Operating in India’s Retail Sector

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