More than 50 mid-tier global retailers are planning to enter India within the next six months, according to Franchise India Holdings.
The franchise consultancy is working on the launch of 53 brands including Evisu, Korres, Lush Addiction, Melting Pot, Migato, Monnalisa, Pastamania and Yogurt Lab.
Mainly from Singapore and the US, the companies are investing about US$300 to $500 million each and aim to open about 3000 stores altogether to cash in on the country’s expanding economy, booming consumption, urbanising population and growing middle class.
“The first retail wave happened a decade ago when bigger retailers and brands entered India,” says chairman Gaurav Marya of Franchise India, which is helping the brands find partners and obtain regulatory clearances. “Now it’s the turn of small and midsized brands as they look to cash in on the open retail policy and huge gap in the market for branded products.”
Of the incoming brands, 18 are in the F&B space and 13 each in apparel and lifestyle products and education products.
In an AT Kearney report this month, India replaced China as the most promising retail market in the world. The report says India could be the next bright spot for retail now its government has allowed 100 per cent foreign ownership in B2B e-commerce and for retailers selling food products made in India.
“Ideal target”
“Government efforts to boost cashless payments and reform indirect taxation with a nationwide goods and services tax are also expected to accelerate adoption of modern retail,” says the report.
“India’s growth and development make it an ideal target,” says chairman Andrew Withers of British quick-service restaurant Southern Fried Chicken, which has 700 franchise stores globally. “Chicken products are the major non-vegetable food in the country, making our menu ideally suited to the market.”
India’s government relaxed the rules for foreign direct investment (FDI) in single-brand retail last year, spurring interest among such brands as Gap, H&M, Ikea, Massimo Dutti and Uniqlo.
India’s retail market was worth US$641 billion last year and is expected to reach $1.6 trillion by 2026, growing at a compounded annual growth rate of 10 per cent, according to the India Business of Fashion 2017 report.
