India is recognized as the second most thriving markets for retailing, among the growing nations across the world. This opportunity of opening up the retailing sector is a great opportunity for the foreign players who have a strong presence in the international markets.
FDI in retail has been made easier by the liberalization of the trade policy and loosening of the barriers to entry that were prevalent in the retail sector.
The major business in the retail sector must be attributed to the players in the unorganized sector as of the current scenario.
But the organized sector is expected to grow most and faster than the unorganized retail. The country’s consumer goods that are retailed through modern trade are outpacing the retailing done by general trade.
This can be because of factors such as a favourable environment that is provided by these modern trade outlets to the consumers, that enables them to touch and feel new products.
This new experience is targeted at specific brand-building. The ambience provided by these retail stores help to sell premium brands more efficiently.
The open shelves and perfect lighting aim at enhancing the packaging of such premium brands. Niche categories such as breakfast cereals and anti-ageing products that have low penetration are expected to benefit from modern retail stores.
Multi-brand retail may benefit to the larger main stream population of the country.
On one hand, it is the end consumer who gets to choose from a variety of products that will be offered at competitive prices across various retail outlets.
On the other hand it is the supply chain that is going to be improved, since more than half of the investment should go into improving the infrastructure at the back end.
This will also halt the migration of people from villages to cities by improving employment opportunities in the agrarian sector.