Passage to India
The Indian retail industry, with a compounded annual growth rate of 12 percent, is estimated to reach $1.2 trillion (USD) in 2021, according to Indian Brand Equity Foundation. To top this, India recently replaced China as the most promising retail market in the world, according to an A.T. Kearney report.
The past decade has seen many global brands entering India. The charge is led by fashion and lifestyle brands that have propelled the country to the global top spot in apparel growth rate with a CAGR (compounded annual growth rate) of 8.7 percent, according to Euromonitor International. Of the top 25 global brands listed in the report, 18 of them have already made inroads into India.
There are three routes to enter India: Single Brand Retail Trading (SBRT) with 100 percent FDI (Global Direct Investment); Multi Brand Retail Trading (MBRT) with a maximum of 51 percent FDI; or the franchisee route.
Interestingly, few global brands have had a new lease on life after entering India. Marks & Spencer, in the process of shutting stores in many countries, has the largest number of stores outside the U.K. in India with a network of more than 60 stores across 27 Indian cities. Iconic toy retailer Hamleys, with 167 stores in 18 countries, was recently acquired by Reliance Retail and celebrated with the launch of its 100th store in India. The other end of the spectrum are brands like Debenhams, Timberland, Lush, Espirit and GAS, who had to exit India owing to unviability in the Indian market.
Today, global brands can make informed business decisions based on predictive data available from online sales across different consumer segments, such as, luxury, premium and value. Their entry with updated global concepts of store design, visual merchandising and store experience in prime locations and in premium malls, high streets and airports has helped deliver world-class experience to the Indian customer across these segments.
Passion for Fashion
The premium global fashion segment, popular with the Indian millennial middleclass, has rapidly grown its footprint across major metros and towns. Most of them are through joint ventures with established Indian retail partners. Arvind Fashion group retails 16 global brands in more than 700 stores located in roughly 250 cities. Popular brands in their portfolio are Gap, Nautica, Calvin Klein, Tommy Hilfiger, Aéropostale, Ed Hardy, Gant, US Polo Association and Sephora.
Aditya Birla Fashion group offers international brands like American Eagle, Van Heusen and Allen Solly. Reliance Retail chips in with Marks & Spencer and the Tata Group with Zara in this segment. Interestingly, Myntra Fashion, the leading Indian online fashion retailer, has entered the race with omnichannel retailing rights for Mango. It’s also rolling out its offline stores. The company Bestsellers chose to enter India on its own with a successful portfolio of Vera Moda, Jack & Jones and Only.
This segment is driving the store design and visual merchandising standards in India today in the fashion category with imported resources and systems to drive quality of design and execution.
High on Value
Amidst the brutal price war waged by online giants in India, few global brands have responded with strategically designed and priced product offerings in engaging shopping environments that deliver compelling value to the Indian consumer. Forever 21, brought to India by Arvind Fashion group, has presented its affordable fast-fashion styling with great panache to the fashion-seeking youth of India. Decathlon, French sports specialist that’s on its own, offers great value for sports gear in an experiential setting and has been successful in transforming the outlook to an active lifestyle in India.
Original Article and Credits to: https://www.vmsd.com/content/retailing-india-passage-india