NEW DELHI, June 11, 2018 /PRNewswire/ -- Recently, MINISO has been focused on the potential of the retail market in India. National and urban economic growth is one of the most important factors to determine market potential. India is expected to be the fastest-growing country in Asia. The Paper indicated that India's economy has been developing well in recent years. According to a recent report by the World Bank, India's economy grew by 6.7% from 2017 to 2018 and is expected to grow to 7.3% by 2018, overtaking China as the world's fastest growing economy again. Combined with reports from several authorities, it can be predicted that India's economy is on track for cyclical growth, with GDP rising to over 7.5% between 2018 and 2019.
In 2017, India's GDP was about $2.6 trillion, becoming the world's sixth largest economy. According to the Economic Times of India, India would become a $5 trillion economy by 2025, said Subhash Chandra Garg, Secretary for Economic Affairs. Along with that, the economic aggregate of India will also overtake Britain, France and Germany and become the world's fourth-largest economy by 2018. The rise of India cannot be underestimated.
The total revenue of India's retail sector is expected to reach $1,100 trillion by 2020.
The rapid development of the economy also laid a good foundation for the prosperity of India's retail industry. According to the IBEF (India Brand Equity Foundation), India's retail sector is one of the fastest growing sectors in the world, with revenue expected to grow to $1100 trillion by 2020 from $672 billion in 2017. It is obvious that India's retail industry is experiencing exponential growth with a surprising development momentum.
According to two surveys from Morgan Stanley and Reuters, India's economic recovery is strong, with per capita GDP reached $1,974.8 by March 2018. Currently, India's consumer group is mainly young people, with both men and women, of above-average income level. This is one of the most significant reasons for the huge potential of India's retail market. Sound economic growth, changes of population structure, increase in disposable income, urbanization, changes in consumer tastes and preferences, etc., these are the factors for the development of the retail market in India.
At present, the Indian market has become a fertile place for many international retail brands to develop in, including Gap, H&M, ZARA, MINISO and other famous chain retail brands. Among them, MINISO, the Japanese designer brand, is deeply loved by local consumers due to its extremely simple design and high-quality and low-price products. So far, it has opened 20 stores in India. India is the most important region for MINISO's global business. Through in-depth market research, it is easily found that growth of India's consumer market is mainly due to a favorable population and increasing disposable income. MINISO attaches great importance to the future growth of India.
The global brand MINISO is expected to open 200 stores in India by 2018.
The Indian market has become the ideal destination for many international retail brands. With successful experience in operating in Southeast Asia, Europe and America, MINISO stands out from retail industry. Its unique business model has formed a so-called "new retail" since it entered the market.
MINISO India Subsidiary was founded in September 2017, has opened 20 stores in India so far, and is expected to open 200 stores by the end of 2018. Mr. Joy, the general manager of MINISO India said that centering on Delhi NCR in the north of India and the Bengaluru in Karnataka in the south, MINISO has adopted the strategy of developing around north-south key cities. Currently, MINISO has opened 18 stores in New Delhi and 2 in Mumbai, which are all located in the north part of India. Next, MINISO plans to expand in major cities across western and southern regions of India and then in tier 2 cities.
With high quality and affordable prices as well as exquisite design, most MINISO products are priced between 150 rupees and 450 rupees (approx. $2 and $6.5), thus earning love from the major consumers aged from 15 to 40. MINISO is popular with local consumers, and new products are usually sold out.
Mr. Joy also indicated that national conditions of different countries vary, thus the market strategies shall change accordingly. India is a country with great opportunities and a growing economy. Doing business in India can be challenging. It is of utmost importance to understand the culture and way of living of the Indian people. Patience is another key word. Thoroughly investigating what the company wants to achieve in India is required. Getting advice from other people or businesses who have been present here for a longer period of time and finally not expecting direct results, because business in India is based on personal relationships and these take time, are also requisite. Therefore, MINISO joined the RAI (Retail Association of India) soon after it entered the Indian market, which has helped MINISO maintain sustainable development, facilitated and provided support to modernize the India retail industry.
Consumer spending in India is growing at 12% a year; global brand MINISO is favored by local consumers
India's robust economic growth and rising household incomes are expected to increase consumer spending to US $4 trillion by 2025. The maximum consumer spending is likely to occur in food, housing, consumer durables, and transport and communication sectors.
With the increase of India's consumer spending, Indian buyers gradually turn as cofactors to mould their preferences, buying habits and thereby lifestyle. Following the trends of international markets, Indian consumers are transforming as global buyers preferring foreign origin goods, especially those famous brands with better quality, more fashionable design and lower prices. MINISO is a typical example. Any foreign brand in India will inevitably encounter competitors. At present, both domestic and foreign brands in India are grabbing the share of the consumer market, and the competition is fierce.
The Reliance Industries and Tata Group are the powerful enterprises in India, with strong competitive advantages in telecommunications, textile, retail and beverage. However, MINISO India is a global brand, opening more than 2,600 stores in over 70 countries and regions, including the U.S., Australia, Canada, South Korea, Japan, China and Vietnam. In 2017, the turnover of MINISO reached USD 1.8 billion, which has doubled compared to the turnover of 2015. Joy was confident that with a strong distribution network through highly efficient and flawless logistics and warehouse management, MINISO unquestionably has an advantage over other local brands.
In terms of consumption expenditures, emerging cities (those with populations of less than 1 million) will be the fastest growing. Fueled by rising affluence, expenditures in these cities are rising by nearly 14% a year, while consumer spending in India's biggest cities is increasing at about 12% a year. It is expected that emerging cities will see the highest growth in the number of elite and affluent households through 2025. By then, the number of such households will have increased by a factor of more than 2.5 in emerging cities, while it will have almost doubled in major metropolitan areas. Furthermore, some 120 cities will have matched today's major metropolitan areas in average household income.
Therefore, it seems promising that India's consumer demand will continue to rise, and spending power will be strong in the future. India hit a ten-year high and stood first among the 63 nations surveyed in the global consumer confidence index with a score of 136 points for the quarter ending December 2016. Global retail brands like MINISO are ready for fighting for market share in India, which must have fruitful results in the next five to ten years.
