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Mar, 01 2007

India, the next biz destination

One-and-a-half decades into the process of economic liberalisation and global integration, India is becoming as a credible business partner, preferred investment destination, rapidly growing market, provider of quality services and products

FRANCHISING in India is gradually being accepted as a low risk investment format, and a safe way to business expansion. Longstanding established companies, such as, Pizza Hut, McDonald''s, Subway, Marks & Spencer, and UCB, are consolidating their position in the Indian market. New international companies like Nando''s, Costa Coffee, UPS, Barnies Coffee, and Bread Talk, are emerging on the market scene using the franchise format to expand their business in India.

European investors see India as a good investment destination despite political uncertainty, bureaucratic hassles, shortages of power and infrastructural deficiencies.

Agreeing to this reality, Mr Pankaj Chaturvedi, CEO, Baskin Robbins, (Master Franchisee for India), goes on to elaborate, “Franchising has always been present here, though not many would have termed it as so. One of the most successful franchising models in India has been the one which we grew up with i.e, BATA Shoes. However, it is only of late with the entry of a lot of MNCs and high profile brands, that franchising has acquired a more glamorous image. Suddenly, you find a host of people who would never otherwise have dreamed of running a store (imagine housewives/MBAs/etc running a shoe store) opting to take up a franchise. Internationally, franchising is the accepted way of expansion (especially in retail) across categories such as food, garments, fashion, cosmetics, lifestyle, you name it. The same is now being replicated in India. Quite obviously the market is nowhere near, the way it has evolved in the US. However, slowly, but surely, we will get there.”

India presents a vast potential for overseas investment, and is actively encouraging foreign players to enter the market. In the long run no company of any size, aspiring to be a global player can ignore this country which is expected to become one of the top three emerging economies.

The Indian potential

India is the fifth largest economy in the world, ranking above France, Italy, the United Kingdom, and Russia, and has the third largest GDP (Gross Domestic Product) in the entire continent of Asia. India is also one of the few markets in the world which offers high prospects for growth and earning potential in practically every area of business.

Today, India is one of the most exciting emerging markets in the world. Its middle class, whose size exceeds the population of the US or the European Union, provides India with a distinct cutting edge in global competition. A sizeable population that understands and speaks the English language, is also the reason for the success of India''s franchise industry.

Mr Stephen Giles, partner with Deacons, which specialises in international franchising, says, “In the long term, I believe India has great potential. Indeed, India compares favourably with China in terms of market size, demographics, legal infrastructure and ease of communications.”

India is passing through a consumer revolution due to factors such as expanding middle class, rising education levels, increasing disposable incomes, and growing exposure to global benchmarks. The growth of India''s economy has provided enormous opportunities for entrepreneurs interested in franchising.

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