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AS per a recent report, the Indian franchising market will reach $20 billion by 2013 and is growing at a rate of 38 per cent a year. Spurred by India's booming economy, reception of western concepts and increasing affluence of middle class, India offers f
AS per a recent report, the Indian franchising market will reach $20 billion by 2013 and is growing at a rate of 38 per cent a year. Spurred by India's booming economy, reception of western concepts and increasing affluence of middle class, India offers foreign brands the best opportunity to expand and make a mark. International brands that have already made a mark are on an aggressive expansion, especially in sectors like F&B, apparel, wellness, hospitality and travel and accessories. Witnessing their success via franchising, India has become the cynosure of many international brands in sectors like cleaning services, refilling, realty brokerage, business services, etc.
Initially, the entry of foreign brands was slow but steady. Gradually, they came riding high on the growth radar. In the last quarter, the international brands have grown exponentially and their presence has increased to over three times as compared to the mid-1990s.
The influx of international brands has given birth to premium and luxury sector in India and has bridged the gap between premium and luxury brands. Looking at the opportunity, many international brands franchising in India have customised their products as per the consumer's requisite. A few brands are also changing their product mix and introducing pricing strategies to increase sales. As says Shriti Malhotra, General Manager, The Body Shop, “India is the fastest growing market in the Asia-Pacific region and an important market for The Body Shop because of the sheer size and dynamism of the market. The Body Shop, a global retailer of naturally inspired, ethically produced beauty and cosmetic products, entered India in 2006 through its master franchisee, Quest Retail, part of the Planet Retail Group. Responding to consumers' sentiments on the global economic meltdown and to provide our best selling products at best prices, we reworked on our pricing strategy. We lowered our prices of over 200 best selling products by 10 to 35 per cent across India.”
During the stint of turbulence in 2008-2009, few international brands chose to exit. The reasons varied, while few brands failed due to selection of wrong partners, others had mistaken the Indian consumers' buying habits. There are many foreign brands which made an exit and then re-entered after witnessing a booming Indian market and lucrative business opportunities. Most of the existing and potential foreign brands have preferred franchising as the route for foraying into India. The reason: we all know, franchising is considered the safest mode to expand.