Grocery, apparels top favourites of MNC retailers -- Deloitte

“Mass grocery and apparel are two of the fastest growing

organised retail segments in the country today. In both these segments, there are large domestic retailers who can be potential joint venture partners for foreign retailers,” says senior director of Deloitte Touche Tohmatsu Gaurav Gupta said in a report.

“Foreign retailers can enter the country by forming a new joint venture company, which shall have multi-brand retail stores. Alternatively, the foreign investor may also consider acquiring 51 percent stakes in the existing business set-up of the potential local joint venture partner,” he said.

Another advantage in the segment is that existing domestic mass grocery retailers already source many products directly from producers and ‘small’ food processing units. To meet the policy guidelines on sourcing and to have better margins, foreign retailers will have to cultivate relationships with local manufacturers to drive strong private label brand.

Multi-brand retail in speciality stores such as consumer electronics, footwear, furniture and furnishing are expected to expand and mature in the next few years. However, the condition on sourcing will continue to be a major bottleneck for FDI in many of these segments, the report added.