India as Destination for Western retailers: Opportunities, Challenges and Strategic Decisions

In 2010 the Indian market is estimated to be as big as the European Union. The latest Global Retail Development Index ranks India as the top destination for Western retailers even before rising stars like China or Russia. The purchasing power is rising in India. Hence, the Indian market has huge potential for foreign investment. The Indian market is a market multi-national companies should not miss because of its future importance. But India is also a country with a very unique and complex culture. Indianizing a retail company's assortment and strategy is key to succeed in India. Knowledge of the unique characteristics of the Indian market and culture is vital. When a Western retailers has to decide if the Indian market is a possible destination, the company has to asses which facts speak in favor of India and which speak against the country¿s retail market. The Indian (retail) market provides both opportunities and challenges for Western retailers on a massive scale. This book starts with an overview of the opportunities of the Indian (retail) market such as growing consumption and a demographic advantage. The study also describes the challenges of the Indian market such as the weak infrastructure and the challenges the Indian culture provides. Based on this knowledge, the second part of the book introduces strategic decisions. Necessary adaptations to the Indian market, e.g. when dealing with Indian personnel or communicating with Indian customers, are discussed. Moreover, guidelines, e.g. for choosing the appropriate form of market entry and for choice of location, are presented as well. Finally, recommendations for Western retailers planning to enter the Indian retail market sum up the main results.