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India is still an untapped market for global retailers, says a study

Policy and place to grow are hindering the spread of organised retail in the country, says a report ‘Expanding Horizons of Global Retailers in India’ by commercial real estate services and investment firm CBRE.

It says that while India has emerged as a major destination for retail segments such as food and beverage (F&B), fashion and hypermarket chains, almost 40 per cent of the global retailer base considered for the study was yet to enter the country.

Of those already here, nearly 80 per cent are in New Delhi, while the figure stands at about 70 per cent for Mumbai and nearly 50 per cent for Bangalore – clearly indicating a preference for these metros as choices of location and entry. This entry pattern is typically followed by a move into Tier II cities such as Pune, Hyderabad, Kolkata, Ahmedabad, Chandigarh and Jaipur.

US brands accounted for the bulk of retailers covered in the CBRE study, comprising 30 per cent of the total. Most US retailers were present in the mass market F&B category, while retailers from Italy and the UK accounted for about 19 per cent and 16 per cent, respectively, of the total study, largely concentrated in the luxury segment.

The report says that the problem of limited investment-grade supply of retail space is compounded by high rentals and lack of professional mall management.

CBRE studied more than 300 prominent global retailers to identify operating trends, expansion strategies, and extent of penetration across major cities.

Brands across segments were analysed in the luxury, premium and high-end categories, and their presence judged on the basis of standalone stores within malls as well as high streets. As luxury brands in India have traditionally operated through boutiques in five-star hotels, stores in such locations were also included in the survey.

Published on June 05, 2014

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