AT Kearney ranks India 14th in global retailers list

India has fallen to 14th position as the most attractive

destination for global retailers, underperforming smaller markets such as Turkey, Kazakhstan and Armenia, according to global consulting firm AT Kearney.

AT Kearney's Global Retail Development Index (GRDI), which ranks 30 emerging countries based on a set of 25 variables including economic and political risk and market attractiveness and saturation levels, dropped India nine positions from last year when it ranked fifth. In fact, the Indian market was the most attractive destination five years ago and had consistently occupied one of the top five slots in the last decade.

“The cost of doing business in India because of corruption has significantly deteriorated over the past 12 months. While nobody can ignore India, it's not easy to get their business model translate into profits even after many years," says Debashish Mukherjee, Partner, AT Kearney. This, despite the government allowing 100 percent FDI in single brand for the first time.

Several single-brand retailers entered India in many sectors: apparel and beauty (including Brooks Brothers, Kenneth Cole, Sephora, and Armani Junior), standalone boutiques (including Roberto Cavalli and Christian Louboutin), and food (including Starbucks and Dunkin' Donuts). Large retailers such as Ikea too are finalising their India entry strategies.

India’s GDP growth rate slipped to 5 percent, down from a 10-year average of 7.8 percent. Same-store sales volume growth slowed in 2012 across retail, particularly for lifestyle and value-based formats.