India top retail market among emerging nations

India and Russia continue to occupy the top two slots of the Global Retail
Development Index (GDRI) in 2007 as they have for the last three years.

China vaulted past Vietnam and Ukraine to be placed third in this year’s index, largely on the strength of continued growth in consumer spending, and retailers moving into smaller markets.

Modern retail formats grew between 25 and 30% in India and 13% in both China and Russia last year.

These are among the findings of the sixth annual Global Retail Development Index (GRDI), a study of retail investment attractiveness among 30 emerging markets conducted by management consulting firm A T Kearney.

“India being at the top of the GRDI validates the level of activity and enthusiasm we have seen in the marketplace. We anticipate another year of major investments and new retail concepts changing the rapidly evolving organised retail landscape in India, not just in the metros, but also deeper penetration in tier 2 and 3 cities,” Hemant Kalbag, principal (consumer industries and retail practice), AT Kearney India said.

The study also found that as large cities in China and Russia reach retail saturation, retailers are entering countries through second and third-tier cities where consumers are ready to embrace Western-style retail concepts and products, thanks to the influence of television, movies and the Internet. Until recently, such rapid growth was confined to the largest cities in
each country, the report says.

In China, foreign retailers such as Wal-Mart and Tesco, and Hong Kong-based retailers are branching into smaller mainland cities, such as Yuxi, Weifan, Nanchang and Wuhu.

In Russia, Carrefour recently announced it's entry into the country via
tier-two cities.