| Business management consultancy AT Kearney has a simple advice for its retailing clients: Think and act as if you want to enter India tomorrow. Forget regulatory constraints. Just try and understand its market complexities. |
| "Global retailers have to tweak their business models and work around regulations. We are asking our clients to explore models like cash-and-carry, licensing arrangements and various types of joint ventures to get a foothold in the Indian market," said Joshua Chernoff, Vice-President and Leader (consumer products, retail and pharmaceuticals), AT Kearney. |
| Chernoff is in India to attend the 20th India Economic Summit, organised jointly by the World Economic Forum and Confederation of Indian Industry. |
| AT Kearney, an influential consultancy in the retail sector working for several Fortune 500 retailers, in its recent study, named India as the second-most attractive retail destination among 30 emerging markets, only behind China. |
| Retail attractiveness takes into account parameters like purchasing power, size of the market, government policy and long-term market potential. |
| According to Chernoff, there was a certain degree of frustration among global retailers about their inability to tap a huge market like India. But he added that AT Kearney's advice to them was that they should not let it make them ignore the country. |
| "Retailers should stay on top of the policymakers' minds and be in a position to cash in when the restrictions on global retailers are ultimately eased," he said. AT Kearney is advocating to its clients the highest level of management focus on India. |
| Currently, the Government does not allow FDI in the Rs 20,000-crore organised retail sector, but Commerce Minister Kamal Nath recently said specialty retailers, who also manufactured goods, might be allowed entry. |
| "For large corporations, changing their core business model to suit a particular market is nothing new. Remember, Wal-Mart started its operations in Mexico and Japan through a joint venture," he added. "French retail giant Carrefoure, too, had growth pangs in China but they re-engineered their formats to suit the local markets," Chernoff said. |
| He also countered the government's view that opening up the retail sector to foreign competition will not yield substantial amount of FDI. |
| "To say that it will not bring in large FDI is a self-fulfilling notion for the Government. I would be surprised if the FDI inflows don't go up dramatically when the market is opened up," Chernoff explained. |
| On the development of the country's domestic retail sector, Chernoff said the emergence of large shopping malls had changed the landscape in the past three years. |
| "The consumer, too, is learning to adapt to organised retail and that's why global players should come to India and start learning quickly," he said. |
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