Retail is India is very interesting right now. The deregulation 1st Jan 2012 that started to allow 100% foreign owned single brand companies to enter the retail segment, became the kick-off. Now foreign retails operations are growing well on the India market. IKEA and H&M being the most aggressive Swedish ones.
IKEA products sold in India seem to have lower price tags than the ones sold in European markets. "At IKEA, we target everyone – we want you to come to our store, your boss and your maid, as well," said Juvencio Maeztu, MD Ikea India (source: www.business-standard.com)
It is very interesting to hear IKEA’s vision to reach out to India’s mass market. Our comment to this is that given the stratification of Indian society, will for example, your maid be able to afford/shop at the same store as your employer? It remains to be seen if they can indeed overcome such cultural biases and tap into the lower middle class as well.
H&M is openings shops with good speed, and have now more than 20 stores in India. Also, H&M will start selling online in India next year. The move comes a few months after global rival Zara made public its intention of going online in the country, which is one of the world's fastest growing e-commerce markets in the world. (source: www.business-standard.com)
E-commerce is developing at a rapid phase, and for many retail businesses it is of utmost importance since buying behavior is changing to much more online buying. However, our opinion is that it is often critical to have classic retail presence as a complement to the e-commerce channel, to be able to build the brand. It is otherwise easy to get stuck in a price competition war with e-commerce giants like Amazon.