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Look at the Indian Organised Retail Industry. Would Collaboration with Global Retailers Such as Wal-Mart and Tesco Be a Better Growth Strategy, or Would It Be in Understanding Who Their Major Competitors Are and

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Look at the Indian organised retail industry. Would collaboration with global retailers such as Wal-Mart and Tesco be a better growth strategy, or would it be in understanding who their major competitors are and matching their capabilities and out competing them?

The recent wave of reforms by the Government to incentivize Foreign Direct Investment (FDI) in various sectors is bringing a new zeal to the investment climate in India. One of the most debated reforms is the policy for allowing 51 per cent FDI in multi-brand retail. Organized retail, which constitutes 8 per cent of the total retail market, will grow much faster than traditional retail. It is expected to gain a higher share in the growing pie of the retail market in India. Various estimates put the share of organized retail as 20 per cent by 2020.

The Indian retail industry has experienced growth of 10.6% between 2010 and 2012 and is expected to increase to USD 750-850 billion by 2015. Food and Grocery is the largest category within the retail sector with 60 per cent share followed by Apparel and Mobile segment.

Multi-brand specialty retail segment such as Beauty & Wellness and Consumer Electronics are still in their nascent stage. Their current market size may not hold a big potential for foreign retailers.

India is not one market:
States in India differ in terms of culture, language, socio-economic development etc. Further, different spending power results in different customer segment even within a state. This makes it imperative on the part of the international retailers to customize their offerings to suit regional Indian tastes.

Real Estate Choice:
Another critical success parameter is the real estate choice at prime location and reasonable rentals. This is especially true for a multibrand retailer, which requires a large retail space.

Private Label brand:
To meet the…...

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