In the mid 1990s, Sanjay Kapoor quit his job with Citibank to strike out on his own in India’s retail sector. Today, his firm Genesis Luxury has either formed joint ventures, or is the franchisee for various renowned global brands, including Bottega Veneta, Jimmy Choo, Canali, Kenzo and Just Cavalli, among others. Kapoor, who is currently the chairman of Confederation of Indian Industry’s task force on luxury and lifestyle, told Rasul Bailay in an e-mail interview his views on the recent landmark policy to allow foreign single-brand retailers to own fully-owned subsidiaries in India. Excerpts:
How is the mood among retailers after India lifted the cap on single brand retail?
This is a very positive step for the industry and economy as a whole, as it will definitely increase the interest in India and provide an impetus to the retail sector.
What kind of companies will the latest policy on retail appeal to? Why?
This will encourage some marquee brands that have not yet entered the country. These brands have policies of going into a market with sole ownerships, hence the new policy will appeal to them. The only caveat is the 30% sourcing clause, which they need to overcome.
You are a joint venture partner or franchisee for several global luxury brands. How will the policy entice luxury retailers? Do you see many foreign retailers, especially in the luxury segment, having fully-owned subsidiaries in India by buying out local partners, or would they continue to operate with local partners?
This does not affect existing partnerships as these brands prefer to be in the market with an Indian partner which brings in local expertise and consumer understanding, which may not be easy to replicate on their own. Hence we do not see any of the existing brands changing partnership patterns. The policy will only entice those who were so far waiting to come in with 100% ownership as per their global expansion norm.
How will the 100% foreign ownership in single brand boost retailing in India? What about the luxury segment? Will it help luxury brands to expand faster to tap the growing market here?
It will not have any significant impact on the industry apart from the fact that it allows even more brands to come into the market, hence better supply chain, access to global practices, knowledge sharing and growth of talent in the industry.