International, Trends

Out of India

It has the fastest growing economy in the world. It will soon have more people than any other country on the planet…including China. It has a pro-business government that encourages development and expansion.

And it is largely off-limits to the Western world of retailing.

It is India, and American and European retailers stand a better chance of opening stores on Uranus than they do in this country. In the abstract we’ve all heard how tough it is to open stores in India and how the country sets up artificial barriers to support its independent retailing industry. These include all manner of convoluted rules and regulations requiring assorted local partnerships and single brand configurations, all designed to keep the foreign hordes away.

But my recent trip to Mumbai – the business capital of the country – takes it from the theoretical to the actual. They might as well have a graphic of a Big Box store with a big red slash through it: Big Western retailers not welcome. Mumbai, with a population of 12 million – all of them seemingly standing in front of you at every intersection – is a city of thousands of small retailing store fronts with nary an American or Western brand in sight. These stores are generally under 1000 square feet…or about the size of the customer service counter at your neighborhood Target. They usually sell just one merchandising category, be it apparel, cutlery or tires. And a surprisingly large number of these retail establishments seem to be medical offices for all manner of surgical and non-surgical procedures best left to your own imagination.

There are some familiar brands but they are largely restricted to the luxury malls that I assume cater to tourists and the locals who drive BMWs and live in high rise condominiums. Louis Vuitton, Chanel and their brethren are there, but as far as the casual observer could see, there was no equivalent of a Fifth Avenue or Rodeo Drive.

Even American fast food joints – so ubiquitous in China, Japan and even other countries generally inhospitable to American retail imports – are few and far between in India.  In fact, India may be one of the few places in the world where a search for the Colonel is as arduous a trip as the young boy in the movie Lion endured.

There is much talk of India opening up its retail borders to allow for more Western and American retailers to set up shop. So far, that’s all it is: talk. Which presents itself as both an amazing opportunity for expansion-starved retailers maxed out in the rest of the world and an enormously difficult hurdle to overcome. On my visit, I went into several of these local retailing establishments and found them to be charming anachronisms of a business era long gone in the rest of the developed world. In my travels around the retailing world there is no other place so dominated by small independent specialty retailers protected against the ravages of modern merchandising.

I wonder if they realize how special they truly are?

Warren Shoulberg is editorial director for several Progressive Business Media home furnishings publications. His trip to India was his first…but surprisingly not necessarily his last.

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