India remains attractive to global fashion and lifestyle brands, according to a research by management consulting firm Third Eyesight.
While the growth of new international fashion brands entering the Indian market has been slow over the last three years, there are already over 200 international brands present in the market, says the study.
Almost 30 per cent of the international brands present in India are American while about a fifth of the brands are Italian. Other key countries from which the international fashion brands have originated are UK, France and Germany, it says.
Further liberalisation of policy on foreign investment in retail in September 2012 has not brought a flood of foreign brands and retailers.
However, some of the existing brands have used the opportunity to increase their stakes in the Indian business including converting their Indian business to a 100 per cent owned entity, thus demonstrating their longer-term commitment to the market.
At the operational level most brands have taken a cautious approach to retail growth focusing on operational efficiency and tapping second-tier markets and channels such as e-commerce to sustain their business. Levi Strauss, in fact, preferred to cut back on sales in order to focus on better margins.
This year, however, looks to be a promising one, with brands such as H&M preparing their entry.
“India is not just a short-term opportunity but a growth market that could possibly make significant contribution to the international brands’ global business in the future,” Third Eyesight concludes.