At the & #BANNER1 & # India Retail Forum 2007, Abraham Goren, executive vice-chairman, Elbit Imaging Group, made a comparison between Central and Eastern Europe (CEE) and India with regard to retail.
He said that when the CEE countries saw the retail boom in 1997, their condition with respect to average incomes, interest rates, economic growth, and number of malls and hypermarkets was not as good as in India today.
Then, the middle class of the CEE earned an average income of US$150 and there were very few superstores. Therefore, the growth of retailers seemed difficult. But this changed by 2004, when the number of malls and hypermarkets blossomed. He supported his point by giving an example. The Czech Republic had one hypermarket per six million shoppers in 1996. This increased to one hypermarket per 1,00,500 people in 2004 and further to one per 60,000 people in 2006.
In India, there are currently 200 million people who earn an average of US$1,000 per month in 35 cities. According to him, India is in a far more advanced stage because the economy has been experiencing a steady growth of 8-10 per cent for almost a decade. The middle class is growing and there is modernisation of retail infrastructure. About 60 per cent of India's population is under the age of 35. Therefore, there are lots of vibrant young individuals who are fashion conscious and willing to spend more and experiment with their lifestyle and new products and services.
He suggested a few things that should be taken care of to add more value to the retail boom in India. India would benefit drastically if the government could make improvements in the current retail laws, which are rigid and make it difficult for foreign companies to acquire land. Lastly, there should be improvement in general physical infrastructure and easing of restrictions and regulations on foreign investment.