How to Enter the Indian Retail Market

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The promising Indian retail market

India is the fifth largest retail destination in the world and its retail market is projected to grow from USD 672 billion (2017) to USD 1200 billion by the year 2021 with almost double the growth rate. However, India’s consumer expenditure is far beyond what its existing domestic and foreign retail players could cover. India’s consumer expenditure is expected to reach from USD 1824 billion in 2017 to USD 3600 billion in 2020. That’s a strong reason why many foreign and domestic retail players will seek to enter the Indian market.

The online retail market in India is currently one-fourth of its organized retail market and is growing at a CAGR of 23%. It is expected to reach USD 170 billion in the next ten years. And these figures are like nothing as compared to the ever-growing retail market appetite of India.

Source: www.ibef.org

Let us have a look at two big entry-strategies for entering the Indian retail market.

Going solo

The ‘company-owned, company-operated’ model is the most straightforward format of entering a market. In this model, the business is established, managed, and operated by the company itself. The company goes through the official formalities, builds the infrastructure, hires employees, establishes the supply chain network, manages its finance, and carries out the production, sales and marketing activities, etc. all on its own. The company enjoys absolute control over how it exists and functions. This model works best for businesses conversant with operating a retail channel in India; a tough ask that redirects businesses to ‘team-up’ or find a business partner in India.

Teaming-up

Different possibilities of business model structuring open up when two or more companies, with mutual interests, decide to work together. Such associations could be mergers and acquisitions, amalgamations, strategic alliances, partnerships, franchises, etc. But the bottom line is that it is no longer a solo model. For example, a local restaurant with a strong brand name may prefer to extend their operations to an adjacent city using a franchise model. Or a domestic tour and travel company may enter into a strategic alliance with local travel agencies in different cities to strengthen its customer base across the country. Or two local travel agencies in a city may merge to form a bigger entity to do better business.

So, whether it’s a startup or an existing business, in India or any other country, planning to enter the Indian market, ‘teaming-up’ in one way or the other, if done right, will help these businesses in resource acquisition and sharing, mitigating business risks, sharing of technologies, reaping the synergies (experience and expertise of both the businesses), and most importantly, making business possible.

In both cases, there are regulatory stipulations and norms to be adhered to and followed.

Decisions on the business model and strategy, channel decision (physical, eCommerce or omnichannel), ownership, operations control, basis of profit/revenue-sharing, how the finances are going to be managed, adherence to regulatory norms, quality standards, HR, supply chain management, etc. would depend upon the business arrangements between the two (or more) enterprises who have decided to do business together.

YRC as a business associate

Your Retail Coach (YRC) is a retail consulting and outsourcing company in India offering a wide range of services in retail offline, retail eCommerce and retail omnichannel catering to a multitude of industries.

Your Retail Coach (YRC) helps retail businesses with their e-store and online marketplace sales management strategies and practices with a focus on developing brand awareness. Our experience and expertise in both offline and online retail channels will help businesses quickly establish their retail operations and set their brands in motion.

YRC assists retail businesses in managing their supply chain via services and support in warehouse management, procurement, inventory management, dispatch and team management riding on proven models of logistics and use of technology.

YRC provides the necessary assistance to businesses in setting up and maintaining a robust distribution network across the country.