The Gold Rush

There was heightened activity around investments and consolidation within the Indian retail industry this year. Seated at the high table are Reliance Industries, Walmart-owned Flipkart, JeffBezos’ Amazon, and the Tata group. Game on, then.

- DEBOJYOTI GHOSH AND ANSHUL DHAMIJA

With a consumer base of over 1.3 billion and an estimated value of a shade below $1 trillion, India is a gargantuan market for retailers—both offline and online. The only other comparable market of such scale is China, where entry is heavily restricted. U.S. retail giants such as Amazon and Walmart have literally been kept out from the consumption growth of the East Asian country, allowing them, instead, to pour billions of dollars into India’s retail consumption story. To date, Amazon has invested over $6 billion in India, while Walmart acquired Flipkart for a hefty $16 billion in 2018.

“There is a large pie to be taken and this [billion-dollar spend] is the price for getting a seat at the table and being in the reckoning,” says Sanjeev Mohanty, managing director, South Asia, Middle East & North Africa of Levi Strauss & Co. “It’s a free market and that’s what is most attractive.” The retail sector, according to the Retailers Association of India (RAI), contributes 10% to the country’s GDP and employs about 46 million people.

So, to be in the reckoning, even during the Covid-19 pandemic—which brought the retail sector in the country to a virtual halt—top-dollar investments and big-ticket deals continued unabated. For starters, Mukesh Ambani’s Reliance Retail Ventures Limited (RRVL) raised a staggering $6 billion in growth capital and is in the process of buying out the retail operations and other assets of Kishore Biyani’s Future Group for about $3.4 billion.