FDI in Multi-brand Retail: An Analysis of the Impact on Different Stakeholders and Possible Options for Indian Retailers

Abstract

Modern formats of retailing have evolved as a new frontier in services sector in last few years and offering various value propositions to shoppers. With increasing share of organized retailing in India, the retailers have been experimenting in designing profitable business models, sustaining service quality & delivery levels. The massive consumer base in India has attracted many established foreign retailers to consider India as a retail destination. Moreover, with the cabinet's nod to FDI in multibrand retailers in India, the competition from foreign retailers is going to increase multifold. With increased competition the dimensions of retail service quality haveto go thorough changes and more and more innovations are being required to sustain and grow. However, established foreign retailers may establish superior backend supply chain that may benefit the farmers and help keep the inflation low. But it may create new challenges for domestic organized retailers. The paper suggests different strategies for the upcoming Indian retailers to prepare them tocompete in the changing competitive retail scenario and build new value propositions for shoppers.