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May, 01 2008

A survey : Clothing, computer grappling for top slot… closely followed by food

On the basis of `The Franchising World Response Forms`, included in the magazine, we carried out an exercise to understand the respondents` sectorial business interests. The over 1,000 responses from almost every corner of the country, were concentrated m

Two segments, clothing and food continue to dominate. However, so much is the interest generated in computers and its networking that it has overtaken the consumer food item and parked itself in its place at second slot. Specialised segments, viz, entertainment, beauty salon, courier service, have two or three major players who control the field.

Area-wise penetration

Area-wise penetration of branded product is more in the metropolitan cities, whereas category-wise we see clothing and food penetration.

New Delhi and its surrounding areas were very excited about computers and the internet and showed a remarkable high as compared to clothing and food segments. Thought Mumbai was also bitten by the computer bug, yet, clothing and food were not far behind. The South again responded more for computer technology, with Bangalore and Hyderabad emerging as stiff competitors. Other metros like Calcutta and Chennai did not show any major interest and opted for specialised segments. Cities like Nagpur, Pondicherry, Jammu, Siliguri and the Union Territory of Goa also had diversified interests, though computer and the internet continued to be the main attraction.

Major towns of Punjab inclined more towards clothing and food, though some pockets like Jalandhar, Patiala and Chandigarh showed interest in computer technology.

Respondents marked more than one area of business interest and those already running a business were seeking to diversify. A total of 65 per cent respondents had their own business and wanted to expand or diversify.

Category % domination

Clothing & shoes:

In the survey, clothing occupied the top position with 17 per cent. The interest for the category was generated among the age group 20 to 40 years. Interest was inclined towards children`s clothing, manufacture and designing. domestic brand competed well against those with international bases.

Computers:

Computer education and internet, combined, were placed second at 16 per cent. General education was 6 per cent. Most showed interest in the internet making up 10 per cent of the total.

Food:

Food was pegged at 13 per cent. Fast food category made up for more than half followed by specialities and restaurant. There was good response for international brand names. Punjab showed keen interest in it and here again the segment was fast food.

Entertainment:

Entertainment has shown considerable growth in recent years. The category was placed fourth at 8 per cent and was dominated by the 20-30 age group, thought marginal interest was also shown by the other groups

Other categories:

Besides the three top categories, other interest areas are entertainment - rising in the popularity graph - advertisement, automotive care, business aids, courier, hotels, travel agency, beauty salon, florist.

Some of the categories that evoked fairly good response were: travel- 5 %, beauty salon - 4 %, advertising, automotive service, business aids, florist - 3 % each, the rest of the categories combined consisted of the 25 per cent.

Age grouping

The age group for the segments computer, food and entertainment was much wider consisting of between 25 to 50 years.

Response was the maximum in the 20 to 30 years range which made up 39 per cent of those who responded. Most of the 20-25 age group were unemployed graduates seeking to start a new business on their own with an investment ranging between Rs 2 to 10 lakh. Interestingly, only 5 per cent were ready for partnership, the rest were keen on running the business on their own. About 24 per cent of the respondents were employed in the age group 25 to 40 years. Majority wanted to use their experience and skill to start their own business under a known brand name. In the above 50 age group 11 per cent responded seeking information on food, clothing and computer franchise.

Clothing category attracted the 20-40 age group with 48 per cent interested in it, whereas in the computer segment the respondents` age group was lower at 20 to 30, of which 51 per cent sought more information. In the food category, again, the 20-30 age group responded with 52 per cent showing interest.

Investments

Most were willing to make an investment of between Rs 2 to 10 lakh making up over 50 per cent of the total, while 12 per cent came in the Rs 20 lakh and 5 per cent in the above Rs 30 lakh investment category. Few opted for seeking loan to run their business. Those who were employed, whether in private agency or government department, were in the investment group of Rs 1 to 5 lakh. The lowest group consisted of Rs 10,000 to Rs 1 lakh and made up 10 per cent.

Most said they did need to borrow money, whereas a few were undecided.

Franchising conscious

A majority was acquainted with the concept of franchising and all agreed that a franchise with a good brand name was a time-tested technique to do safe business. A few others confessed that they did not feel comfortable at marketing and this was another reason why they were opting for franchising.

Another category of respondents reasoned their franchising option as life-long income. Some said the work was easier and showed more profits. Still another set of respondents said it would keep them busy.

Respondents who were employees were aware of franchising and its advantages. Besides money, which was the main criterion for opting for franchising, they wanted to be their own boss and use their expertise to start a new business under a noted brand name.

The future

In a nutshell, the three segments viz, clothing, computer, food are competing for the top slot with very little margin among them. Computer education and technology has taken the country by storm. The younger generation is raring to go in for almost all the three top categories with investment anything between Rs 1 to 20 lakh.

It is certain that in days to come franchising will be the talking point about business and as the service economy growth in the country, opportunities for franchising are going to be plentiful.

Every new franchise creates eight new jobs, say industry estimates. The global franchise economy alone accounts for 17 per cent of the world`s business and directly employs 25 million persons.

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