With foreign direct investment being allowed only in 2012, the review year did not witness a change of market leaders in the India retailing market. Domestic players continued to dominate the market. Seven out of the 10 leading retailers of the country were domestic. However, these players still account for a small percentage of the market as more than 90% of total retailing was dominated by small independent retailers.
2012 witnessed strong growth in internet retailing due to a surge in use of computers and internet penetration across the country. Trust also grew in the internet as a retailing channel, and television advertising campaigns throughout the year also helped maximise awareness. Value sales through this channel were primarily driven by apparel, footwear, personal accessories and eyewear, media products, books, as well as beauty and personal care products. Consumers still visited stores to get the touch and feel of the product, but increasingly used the internet to get the cheapest deal.
After much discussion, the Indian government approved 51% of foreign direct investment (FDI) in multi brand retailing in the last quarter of 2012. This was followed by the decision to allow 100% FDI in single brand retailing. The decision of FDI approval was warmly met by urban consumers as the availability of brands such as Wal-Mart, Prada, and H&M in India was quite exciting for them. However, small grocery retailers, commonly known as kirana stores along with farmers, vehemently protested against the same as this will force out the small domestic players in the future. However, this decision?s complete effect will be fully realised in 2013 due to its recent approval.
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