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The retail sector has been at the helm of India’s growth story.
Major domestic players have entered the retail arena and have ambitious plans to expand in the future years across verticals, formats, and cities.Every brand, be it big or small, has a reason to smile as franchising is proving a successful business model for expanding faster. Let’s find out how smaller cities are trending up under the realm of accessories business. Through a highly replicable concept, many franchisors have been scaling up their retail network by venturing into potentially lucrative cities.
As of today, there has been a rise in demand from smaller cities, where many franchisors have witnessed a lot of traction and thereafter, are thinking in terms of exploring feasible business options for expansion.
Apart from retail growth in urban and tier-I cities, there is also a radical shift witnessed in consumption patterns in smaller towns with people moving beyond necessities and using products that were once sold only in urban areas. They have become big, not in size but in the opportunities they offer. When Baggit started retailing in 1990, the retail sector from then has evolved dramatically over the years. We aim to keep undiluted the core essence of the brand's offering, and we try to localise with minimal changes and yet try to fulfil their requirements. As a result, Baggit opened stores in tier- II & III cities like Hyderabad, Kochi, Pune, Gurgaon with the same line of product, look & feel of a store like that in metros.
Brand awareness, pricing and product offerings are one of the biggest challenges for retail business. To deal with it, brand comes up with local marketing activities to bring awareness of the brand. It also runs promotions to match the price/ product offerings. As the property costs are much lesser in tier-II and III towns, Hence, the chance of being profitable through franchise channel is much higher.
Considering the tremendous potential and accelerating growth rate in tier- II and III cities of India, franchisors are nowadays extremely bullish about strengthening their brand's footprint to give customers a reason to splurge. Franchising is rolling out the red carpet for brands, which till the last few years were craving to make a strong traction in the metro cities amid the fierce competition. Tier-II and III cities are providing a secure platform for brands across the different business segments. There is immense potential and opportunity that exists in these cities that is propelling the brands to grow in towns.
The idea worked out well in Baggit’s favour when we tied up with Reliance Trends to reach out to tier- II & III towns and metros. We have also joined hands with regional players like Centro (Hyderabad based), which is expanding in Andhra Pradesh and Telangana. We are also strengthening our distribution network to tier- II and III cities, through MBO’s and distributors.
The advent of organised retail in smaller cities and the rural hinterland is a win-win situation for all the parties in the ecosystem.
Nina Lekhi, an entrepreneur by profession and a role model for many aspiring young women entrepreneurs had started her journey of success from scratch. Nina was recently conferred Women Entrepreneur of the Year Award 2015 by Rajiv Pratap Rudy, Minister of State for Skill Development and Entrepreneurship. Her achievements in the field of women entrepreneurship had been featured in the book 'Follow Every Rainbow' by renowned writer Rashmi Bansal.