A slew of international brands are lining up to grab a slice of the large and growing domestic consumer market. The increased appetite for branded goods, reflected in the success of brands such as Zara, H&M, Pepe Jeans and Levi, is now drawing significant interest from mid-segment fashion brands like Avva, Colin’s, Collezione and Mavi Jeans. Most of these brands are planning to enter through the joint venture or franchise route, though they could consider going on their own once they scale up. Gaurav Marya, chairman, Franchisee India Holdings (a retail solutions provider), said: “Now, it’s the turn of small and mid-sized brands as they look to cash in on the open retail policy and huge gap in the market for branded products.” As per estimates of Franchisee India, 250 to 300 brands are expected to enter India, bringing in investment of about $1 billion over the next two years. “Many international brands are lining up as the retail sector is growing and international brands like Zara and H&M have been really successful, with strong profits and revenue growth being reported in the country. Now, the slightly mid-level or smaller brands too want to explore the Indian market,” suggests Anurag Mathur, partner, PricewaterhouseCoopers.
However, the focus of these brands will be the top few cities. Industry experts argue that the infrastructure of the country has to improve for these brands to penetrate beyond the tier I and tier II cities. The fashion brands seriously eyeing an entry into India include several from the less-developed markets. Avva, Colin’s, Collezione, Damat, Dufy, Kigili, Mavi, NetWork and Tugba Deri are some of the Turkish brands planning entry. Chinese brand Metersbonwe and French ready-to-wear brand Kiabi are among others eyeing the Indian market. “Brands from Turkey and Greece are much more value-centric than European brands, and are expected to perform well in the country,” says Marya.
Unlike the fashion segment, brands being drawn to the food & beverages segment in India are mostly from the developed markets. Italy-based Illycafe, which runs a chain of coffee shops, France-based fast food chain Lina’s Paris, and the Netherlands-based cafe chain Queen’s Chips are some of them looking to set up shops here. The government’s decision to allow 100% foreign ownership in business-to-business (B2B) e-commerce and food retail, for food products manufactured in India, is aiding interest. Rajat Wahi, partner, Deloitte, said: “With the government relaxing norms mainly in the food segment and with the implementation of the GST, there is a lot of ease in doing business and many international food and fashion brands are looking to enter the country.”