India Loses Top Retail Position To Vietnam

Global Retail Investment Landscape Shifts

Ranking Transformation

In a significant change from previous years, India has relinquished its top position in the global retail investment attractiveness ranking. The 7th annual Global Retail Development Index (GRDI) by management consulting firm A.T. Kearney reveals a dramatic shift in the emerging markets landscape.

Vietnam's Remarkable Ascent

Vietnam has dramatically leaped from fourth to first place, driven by several key factors:

  • Strong GDP growth
  • Favorable regulatory structures for foreign investors
  • Increasing consumer demand for modern retail concepts

Changing Dynamics for Top Performers

The previous year's top three countries experienced notable shifts:

  • India: Dropped from first to second place
  • Russia: Moved to third place
  • China: Slipped to fourth position

Challenges in Indian Market

Hemant Kalbag, Principal at AT Kearney India, highlighted critical challenges:

  • Escalating real estate costs
  • Limited high-quality commercial properties
  • Complex foreign entry regulations

Vietnam's Market Potential

Despite a relatively small $20 billion retail market, Vietnam offers compelling opportunities:

  • Minimal competitive landscape
  • Robust 8% GDP growth
  • Youngest consumer base in Asia (79 million under 65)
  • Remarkable 75% increase in consumer spending between 2000-2007

India's Resilient Market

While facing challenges, India's retail market remains promising:

  • Massive $510 billion market opportunity
  • Rapidly evolving consumer spending patterns
  • Growing market maturity

Key Observations

Foreign retailers entering the Indian market must navigate:

  • Stringent regulatory environment
  • Political complexities
  • High real estate expenses
  • Intense domestic retail competition

The shifting global retail investment landscape underscores the dynamic nature of emerging markets and the continuous evolution of international retail strategies.