Billionaire Mukesh Ambani-led Reliance Retail has topped the list of 50 fastest-growing retailers globally between FY2013-2018 in the Deloitte’s Global Powers of Retailing 2020 index.
Deloitte ranked 250 firms globally in its annual report based on their revenues for FY2018.
The Indian retail major secured the 56th spot this year against the 94th rank the previous year.
“India-based retailer Reliance Retail jumped from sixth in the list in FY2017 to the first position in FY2018, recording a 55.8 per cent CAGR,” Deloitte report said.
According to the report, Reliance Retail is the only Indian company to be featured in it. More than half the retail companies were from Japan, and almost a quarter are in China and Hong Kong.
Reliance Retail recorded retail revenue of USD 18.5 billion in FY2018, a massive increase of 88.4 per cent on its FY2017 performance. “The retailer also became the first Indian retailer to operate more than 10,000 stores in the country,” it said.
“Factors that enabled the company to achieve top spot were a strong focus on boosting e-commerce growth through its website Ajio.com; a push for sales of smartphones and other consumer electronics online; an aggressive pricing strategy across its offline stores; the acquisition of Hamleys, UK-based toy retailer; and new store openings,” the report said.
Deloitte Global Powers of Retailing 2020 is topped by Wal-Mart Stores Inc, followed by Costco Wholesale Corp.
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Amazon jumped to the third position with the highest retail revenue growth amongst the top 10 retailers. Kroger (US) is the only retailer in the top 10 with no foreign operations.
Speaking on the launch of the report, Deloitte India spokesperson said, “Even as the economy is facing a prolonged slowdown, the resilience of the global retail sector is likely to be mirrored in India as well, especially given the tax sops announced for boosting investment in the recent Union Budget for 2020.
“Key initiatives taken by the government including liberalisation of FDI norms for select sectors; a rollback of the much-debated tax surcharge on foreign portfolio investors; incentives to support several industries; bank consolidation, the amendment of insolvency and bankruptcy code enabling the resolution of financial companies, and a significant cut in the corporate tax rate are sure to show some green-shoots in the Indian economy leading to the boost of customer confidence.”
Moreover, the young profile of the country and the increasing dependency on convenience through access to technology and digital platforms make the country one of the growing retail destinations of the world, the spokesperson said.
Key trends and highlights from the report state that retail growth in the Asia Pacific region continues to be driven by changing shopping preferences among growing middle-class consumers, particularly young millennials, and the increasing adoption of e-commerce and m-commerce by the physical retail players.
In efforts to compete with Amazon, FMCG retailers have been employing strategies such as the greater focus on e-commerce, buy-online-pickup instore, cashier-less stores, opening more convenience stores, voice-enabled shopping, and doorstep delivery, it said.
According to the report, despite trade tensions and growing uncertainty around tariff policies, at the aggregate level the global retailers have exhibited remarkable stability. While the highest annual revenue growth in FY 2018 was reported to be in hardlines and leisure goods, apparel and accessories like every other year were found to be the most profitable product category.
Talking about the macro-level global perspective, Ira Kalish, Deloitte Global Chief Economist said, “The outlook for the global economy and the retail industry in 2020 is uncertain. Overall economic growth is likely to be subdued but positive, with lower growth in consumer spending and inflation in most countries remaining low”.