The most preferred retail destination

India is the most preferred new destination for global retailers who now bet on emerging markets to offset worsening economic conditions in the developed world, says a new study. India topped the list in a survey of 323 international retailers about the markets they entered for the first time last year, done by property agents CB Richard Ellis. Yet, several global retailers — who gathered at the annual World Retail Congress in Berlin — seem to have taken a wait-and-watch approach to investing in the country because they are not permitted to enter multi-brand retailing yet. “We think India has the potential but, honestly, we haven’t even studied the market,” said Janet Grove, vice-chair at US department stores chain Macy’s, which is now gung-ho on China. “India is down the road, but first will be China.” India does not allow foreign investment in multibrand retailing. The only way such retailers can operate in the country is through franchise partners. According to the CB Richard Ellis study, which covered 75 countries, eight retailers entered India last year, while seven entered second-placed Turkey. “If many retailers are already entering the Indian market, then I don’t think there is so much of an entry barrier,” said Neville Moss, director – head of EMEA Retail Research at CB Richard Ellis. “International retailers will just be more confident on the sense of ownership given in a foreign country,” he added. In terms of number of international retailers who have presence in a country, India ranks 35 with just about one-fourth of the world’s retailers having set shop here. China is ranked seventh with a presence of 46% of retailers. The list is topped by UK with 57.6% retailers’ presence in 2011. New Delhi ranked as the fourth most popular city for new retail entrants at city level. Retailers are increasingly looking at economies such as India and China, which have the best growth prospects and are least likely to be affected by austerity measures. Many retailers are working to persuade the government to loosen the foreign direct investment (FDI) restrictions in the country with more than a billion customer base. The CB Richard Ellis report expects a change in legislation is expected in the medium term, which may woo many international retailers to India.