Last month, after selling exclusively on Myntra, Dutch apparel brand Scotch & Soda struck a deal with Reliance Brands to open stores in India. It is not alone. Other brands like Dorothy Perkins, TopShop, etc, also tested the e-commerce space when they entered India.
However, the traditional charm of brick-and-mortar has not diminished for most giant lifestyle, fashion and home product retailers.
For instance, IKEA India is currently investing close to Rs 10,500 crore in India to set up 25 stores by 2025, but is aware of the growing reach and popularity of e-commerce in the country. “We want to be available to our customers 24×7, and hence e-commerce and a mobile app are on the agenda. But the first priority are the stores,” explains Patrik Antoni, deputy country head of the company.
Similarly, though H&M’s expansion strategy is to always open at the best business locations, it sees online shopping as a natural expansion of business. With growth in per capita expenditure and increase in disposable income of the rapidly growing urban population, India presents lucrative potential for global brands.
“During the launch phase, Muji’s focus was on exclusive brand outlets since it believes they are crucial to create an authentic brand experience for customers. Having said that, we are closely monitoring the increasing trend of Indian consumers shopping online. Internationally, Muji has a strong expertise in selling online,” reveals Darshan Mehta, president and CEO, Reliance Brands.
So is there a right formula for distribution? “Online would continue to be a part of the offering. The new buzz word is omni-channel. However, it is not easy to execute,” points out independent retail and shopper behaviour expert V Rajesh.
Though most brands plan their entry through cities like Mumbai and Delhi, some are targeting tier-II cities for a phased growth. “Apart from the metros, we believe there is also a huge opportunity in the tier II and III markets to open stores,” asserts Dhatri Bhatt, head, communications, H&M.