India has overtaken China to top AT Kearney's Global Retail Development Index (GRDI), a study which ranks the top 30 developing markets for retail investment, keeping several factors such as favourable foreign investment environment, strong economic growth, consumption boom etc in mind.
India scored 71.7 points, whereas China managed to get 70.4 points. Malaysia, Turkey and UAE constiute the top 5 countries in the GRDI.
According to the study, Mobile shopping grew last year by 121 percent in India, 192 percent in China, 151 percent in Vietnam and 87 percent in Nigeria. Online retail is projected to grow 30 percent annually and reach $48 billion by 2020, said the study.
The study further added, The condition for retailers in India are favorable and will continue to provide strong fundamentals, the study said. The GDP is forecast to grow 7.4 percent in 2017 and 7.6 percent in 2018, which is helping boost the middle class and increase consumer spending beyond the essentials. These trends are expected to help organised retail double in size by 2020.
India has relaxed several factors for FDI in several factors as the government has allowed 100 percent foreign ownership in B2B e-commerce businesses and for retailers that sell food products manufactured in India.
"The enthusiasm around the initial public offering of DMart, one of India's most profitable food and grocery chains, shows that modern retailers are well positioned for profitable growth. This environment has propelled India to the top spot in GRDI."
Various prominent international retailers entered the indian market, including Armani Exchange, Cole Haan, Heatwave, Muji, Massimo Dutti, Kate Spade and Neil Barrett and consumers showed increased interest in these brands.
"World's largest furniture retailer, IKEA plans to invest $1.56 billion to set up 25 stores nationwide. Amazon and Walmart have aggressive rollout plans with Walmart aiming to open 50 cash and carry storesin the next four to five years. The luxury sector also continues to see activity with Saks Fifth Avenue reportedly in talks with local partners to open two stores. However maintaining a profitable online operations is a challenge and hed led to some consolidation. Two of nation's largest online retailers Flipkart and Snapdeal are considering a merger as investors look to lock in returns, cut losses and focus on sustainable growth," the study said.