According to economist Robert Damuth,the demographic trends in India hold great promise for retailers seeking entry into that country’s market—but successful entry will require nimble adaptation to unique consumer demands and market structures. Damuth delivered a preview of a forthcoming white paper at the January 12 session of the National Retail Federation’s 100th annual “Big Show” in New York City.
Compared to the current leading economies, India is young and its middle class—and it urban areas—will expand dramatically over the next 25 years. In the meantime, retailers are well advised to get to know Indian consumers. Damuth says these consumers like small size products, eschew packaged foods, care little about brand and a great deal about price, tend to shop in large family groups, and prefer shops that are near at hand or that deliver to the door and take phone orders--and are ready to extend credit.
Damuth also points out that only 3 percent of India’s retail sector is organized; the rest consists almost entirely of mom and pop operations that cater to neighbors. And geographical and cultural differences, including between the rural and the urban, may be more important in India than elsewhere. Retailers with an eye on urban markets should focus on consumers and strategic partnerships, and in rural areas on credit-based service and partnering with local companies.
Mr. Damuth’s remarks were covered in NRF’s Big Retail blog