Impact of Global Financial Crisis on the Growth of Organized Retail Development in India

The largest financial shock started since great depression which makes countries engage in spiraled mortgage crisis. A loss in confidence by the investors in the United States has led to such a huge depression which had a crippling effect on its economy in turn which had a rippling effect on the other nations as well. The impact of crisis can be felt in developing nations as well which are suffering from one of their largest sell offs. Contrary to the ?decoupling effect? even the developing countries have been hit by the crisis. This crisis has hit one of the most thriving sectors ?The retail industry?. India is the fifth largest retail destination globally. The retail market in India is facing slowdown with the ongoing financial crisis happening across the world markets. Since the markets always have internally linked with each other, the impact of the crisis is generally shared among all. The high level of inflation has been a wet blanket for the global markets. With the suddenly disturbed economical status, consumers are gradually losing interest on buying. The real boom in the Indian organized retail industry started in the second half of 1990s that saw a wave of big business houses joining the fray. At that time India's organized retail sector was at its infancy though there were some known players like Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword in books. Then emerged the new trend, hyper& super markets offering three V's: Value, Variety and Volume. Apart from apparel brands, Consumer durables, FMCG products and Sports brands have also spurred the growth of retails outlets. In fact, so much is the promise of this sector that old economy major like Reliance, BPCL and others want to join the band wagon to cash in on their reach and retail space availability. The country's retail tycoons are now paying for their irrational exuberance in the past. The correction will sober down the industry. The fabled 30 crore Indian middle class that fuelled the retail ambitions of many big business houses in India, is also probably one of the causes for its downfall today. Even as the rich and fashionables continue to throng the malls and retail outlets in cities, the belly of the market, the middle and upper middle class, has suddenly shrunk. The massive slowdown in Indian economy, result of a world-wide financial meltdown, is the main reason. This paper will throw light on different retailers and the impact of financial crisis on them along with strategies to cope the slowdown and achieve sales. This would help in understand the scenario and work towards controlling the spread of recession to Indian retail industry.