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Dec, 10 2012

RETAIL GROWTH AUGURS WELL FOR FRANCHISING

With the landscape of Indian retail industry looking bright, there are great prospects for franchising in various sectors of the economy, notably education, pharmaceuticals, kitchenware and appliances, furniture and sports goods.

THE Indian retail industry is prospering at a fast pace precisely because of factors like penetration of foreign brands, awareness and keenness among people about brands, easy availability of retail space and high disposable income to spend from. From local markets and grocery stores, people are now approaching malls and the Internet to fulfil their needs of reasonable pricing, convenience, efficiency and ambience

Also, the liberalisation of FDI in retail is a step in the right direction which will see more doors opening up in the retail sector and this will also act as the growth driver for a company. Franchising has already moved from fashion to a lot of other categories. Now, a tremendous expansion/ franchise growth is in the offing in the categories of education, pharmaceuticals, kitchenware and appliances, furniture and sports goods.

Luggage industry- a growth story

To state an example, the luggage industry earlier was dominated by the unbranded sector which provided the middle class with only a few alluring travel gear options without promising any guarantee or quality and the only branded players available were VIP and Samsonite. But with increasing interest in travel and tourism, improving lifestyles, cumulative international exposure and a greater awareness among customers, more and more foreign brands seek a stable and growing market in the country. The luggage sector has thus seen a shift to brands like Victorinox, Delsey and Tommy Hilfiger or Tumi that have gone on to take the major share from these brands.

Brands targeting retail space

Malls, which were once the main centre for multiplexes and food courts, have now become a hub for brands, recreational activities and an easy option to access. Brands are now concentrating on the Indian retail space with wider options, exclusive franchise branches and an extensive marketing plan to tempt customers. Even Victorinox is present in the market with a unique and innovative platform called Basecamp that offers the best of brands to its customers, catering to all their travel and leisure needs. Factors propelling its growth are increase in the number of Indian travellers within and outside the country, a booming economy, and transformations in the travel category and smart consumers who not only support such a retail space but also need one as an easy and economical source. Thus, Basecamp aims to target metros and non-metros, malls, high street areas and airports where right travel gear can be supplemented with right communication and right product virtues and collections. It currently has three franchise stores and is in the process of increasing its franchisee base.

Meeting biz challenges via franchising

With the emergence of several organised retail opportunities and influx of foreign trade and finance, the sector has witnessed a tremendous growth. It has also generated job opportunities for millions of people across socio-economic classes. However, companies face problems with respect to attrition rate of sales staff, inadequate communication skills, improper training education, etc. In such a scenario, a franchisee emerges as a rescue to bind the manpower resource, follow the organisational vision and thus contribute to the generation of revenues for both the company and the brand. The franchisee is also benefitted by the brand name of the product and moves from a traditional method to a professional one adopted by these brands. This consequently improves the image of the company/ brand or franchise in the market/ retail fraternity.

About the author

Sameer Sikka is Head, Retail and Travel Gear, Victorinox India. He has a retail experience of nearly 16 years with companies like Raymond, Shoppers Stop, SKNL and Weekender.

The liberalisation of FDI in retail is a step in the right direction which will see more doors opening up in the retail sector and this will also act as the growth driver for a company. Franchising has already moved from fashion to a lot of other categories.

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