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Jan, 04 2013

En route to Success beyond Borders

Indian brands are coming of age. The booming Indian economy has been a game changer for Indian business. While the country's market continues to be flooded with foreign brands, a growing number of homegrown brands, aiming for worldwide recognition, have e

MORE and more Indian brands are setting out to conquer new frontiers of success by embarking on international expansion. For Indian franchisors entering into foreign countries, the F&B, education & training, clothing, and jewellery segments have emerged as the most promising sectors. The education & training brands like Euro Kids, Kidzee, Shemrock & Shemford Group, Aptech, IIHT and CADD Centre; the F&B brands such as Sankalp Group and The Yellow Chilli, Go! Chaatz..; the jewellery brands, namely Gitanjali and Amarpali; and Raymond, Fabindia, Kimaya and Manyavar from the clothing sector have already broken the glass ceiling and successfully exported their concepts to the global arena.  Many more Indian brands like W, Chhabra 555, SportsFit By MS Dhoni, Beebay Kids,  Dream Foods, Lite Bite Foods, Turtle Limited, Taurian World School, and Somany are looking to join forces with them. As franchising is the most preferred international expansion strategy the world over, most of the brands have employed franchise business model for their worldwide launch.

So, what does it take to become an international brand? Each brand has come up with its own recipe for success in international markets. Let's examine the essentials of international expansion, especially for Indian brands.

Realising brand potential

Once a brand has tested and proven its potential and strength domestically, it is ready to scale up to the global stage. Its massive domestic success in IT, animation & multimedia, aviation & hospitality, hardware & networking and English language training paved the way for Aptech's international branding and recognition. “The proliferation of demand for our highest quality of IT programmes from countries across the world made us realise our brand's international appeal. Aptech strives for contemporary education, impeccable execution and delivery and this has helped us in generating a lot of trust in the market,” says Ninand Karpe, CEO & MD, Aptech Ltd. Operational since 1986, the company has trained over 6.5 million students across 40 countries, till now.

Founded in 1980, Sankalp Recreation Pvt Ltd, a chain of specialty restaurants, owns brands like Sankalp, Sam's Pizza and Saffron and quick on-the-go meals formats, namely Sankalp Xpress and Sam's Pizza Quick Pick. With soon-to-be-launched outlets in Australia, the group operates over 110 restaurants across India, USA, the UK, the UAE and Canada.  Kailash R. Goenka, CMD, Sankalp Group, says: “Replicating the taste, quality, services and ambience, each of our restaurants provides an unmatchable dining experience. This has made Sankalp a household name in India. Acknowledging our brands' potential and strength in the domestic market, we realised that the group was all set for international expansion.” The company works on a franchise module and launched its first location in 2008, in USA.

Franchise route to global glory

Indian Cookery Pvt. Ltd (ICPL), a collaboration between renowned chef Sanjeev Kapoor and Better Value Brands, owns restaurant brands like Khazana, The Yellow Chilli, Pin Yin Café and Signature. Its 25 restaurants are spread across seven nations, including India, the UAE, Qatar, Bahrain, Nepal, and some other countries. Nanette D’sa, CEO, ICPL, says: “Right from its formative years ICPL has pursued the franchise route for local as well as worldwide expansion, including our present six foreign locations, the new outlets signed in Gabon, Central Africa, and Dhaka, Bangladesh, follow franchise model. We feel that it makes a good business sense to stick to a tried and tested method.” In the next four years, ICPL is targeting 300 restaurants in home and international markets.

Chabbra 555, India's top wholesalers and retailers of high-end ethnic and Indian women fashion wear, has successfully exploited franchise model to have an enviable chain of more than 60 outlets in its dealership network. Set for global foray, the brand is eyeing international markets like the US, UK, Middle East, Canada, Australia, and a few others. Asheeta Chhabra, Head, Business Development, Chhabra Triple Five Fashions Pvt. LTd, says: “We have been utilising the franchise route to escalate our market share and are simultaneously entering new markets. The model has garnered a good response, growth and business for us in the competitive Indian market; we believe it could do wonders overseas as well.”

Zeroing in on potential market

For Indian franchisors envisioning international expansion, the countries with a strong presence of Indian diaspora are an apple of their eye. There are over 30 million non-resident Indians (NRIs) living abroad who crave for 'Indianess' that brings them closer to home. Kailash R. Goenka insists: “Our larger client base abroad is primarily NRI, and then the local people are also interested in global cuisine.” Capitalising on the demand for Indian food abroad, Dream Foods India Pvt. Ltd (DFIPL) is targeting the US, UAE, New Zealand, Canada and some European countries. DFIPL's Founder & CMD Prawal Choudhary says: “We are going international with our key brands, namely Urban Dhaba, Idly Junction and Cafe 901 as there is a strong demand for these concepts in international market.” Besides NRI population, Indian tourists and even locals offer a potential clientele, especially to F&B brands. “Indian food is getting popular with locals in many countries. As we have something for everybody, including the casual as well as gourmet diners, there is a large captive market for our chain of restaurants,” says Nanette D'sa.  According to her, the Indian restaurant franchisor should also consider factors like local customs and licensing laws, granting of visas to Indians, availability of a skilled workforce and Indian groceries.

Dealing with challenges

International expansion can be extremely rewarding for Indian franchisors. At the same time any loophole in research and strategy would be a recipe for disaster.  To survive in a global trade environment, an Indian brand may need to adapt itself according to the international market scenario and norms.  “All emerging markets are potential business destinations for Aptech,” says Ninad Karpe. “Apart from local knowledge of laws, customs and social values, the understanding of market dynamics and target customer are some of the notable challenges for Indian brands seeking worldwide recognition,” he adds.

Asheeta Chhabra feels that in international ethnic wear market, the biggest challenge is to provide adequate variety to customers and maintain the same quality standards as in domestic market. “Our approach is encapsulated in thinking globally but acting locally,” she says.

For Kailash R. Goenka a reliable franchise system is the key. He says: “We have formulated a reliable franchise system to address issues that may come up in the course of the business and provide 'Training to Turnover' support to all franchisees. By default, the franchise route is the only route to spread our wings in distinct markets.”

Finally

In addition to the above mentioned pointers, finding right local franchise partners is a key to a brand's success in a new market. They must share the franchisor's vision and should be financially capable. They should be committed to creating a strong goodwill, and have a passion to grow the brand and business to greater heights.

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