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As they speed up their operations to establish their brands here, we catch up with a few of them to understand their strategy and their inclination to take the franchise route , writes Zarafshan Shiraz
Identifying India as their top priority market, French brands are customizing their products and services to suit the taste of India’s geographical and cultural diversity. So what are the factors that are enabling them to work their way into the complicated yet profitable Indian markets? Here are some relevations:
Growing steadily from USD 672 billion in 2017 and expected to cross USD 1 trillion by 2020, the retail market in India dislodged longtime leader China last year to gain top rank in the A T Kearney’s 2017 Global Retail Development Index. “All eyes are on the retail market now. There is huge potential. We can already feel it,” says Alexandre Teixeira, Export Area Manager, Groupe Beaumanoir (Morgan de toi , Bonobo, Cache Cache, Bréal, Scottage) in an interaction during the Business France Event organised in New Delhi in May.
Speaking on behalf of his brands that are targetting to enter the Indian market, he confides, “We believe this potential is going to grow over the coming three years and this is the right moment to check out partner-ship opportunities, chart out a long-term plan and push hard for future developments.”
Having undergone a major transformation in the last 10 years, the retail market in India has witnessed tremendous growth during this span and currently accounts for over 10% of the country’s GDP and 8% of total employment. The report by A T Kearney points out that India’s growing middle-class, rapidly expanding consumer spending and increasing urbanisation have helped it overtake a mature market like China. “There is only one thing that you can compare between India and China – the potential.
The rest of the game is totally different,” says Teixeira who seems confident about his company’s performance in the fashion apparel and accessories segment. The group has already tasted success in China.“The middle-class seg-ment, which makes for ourconsumer base, is growing at a faster pace in India than in any other country.
Therefore, this market seems like a real competitive opportunity,” says Sylvain Dizerens, CEO, Kunz Dry Cleaners, who is currently looking for an arrangement with an Indian company to sell an app for his brand which can be used to manage their business in India, France and all over the world.
For brands that are taking the first step to foray into the Indian retail sector, there are some which are looking for suitable franchisees to take the business forward while the rest are searching for partners who are well-versed with the domestic market scenarios. “Since we are not known, we want to go with a business partner who has an established reputation,” says Matthias Klaas, Export Manager, Mobalpa Kitchens.
However some French brands are looking for the right partner which is going to preserve the positioning of the brand. “Our brand has a strong DNA which we would not like to dilute. If we need to adapt to bits of the local market, we will try to make it as relevant as possible,” says Teixeira.
So when it comes to forging partnerships with leading domestic brands, what is it that the French companies are keen about? Primarily, the local partner has to have an edge in the retail sector, both in terms of consumer loyalty and brand visibility. Secondly, the company must be financially stable. While Mobalpa is looking for partners in the areas of construction, furniture and beauty salons and beauty
products, Guinot Institut Paris is keen on collaborating with distributors who can tap independent beauty salons in India.
Says Gabin Belabed, Area Export Manager, Guinot Institut Paris: “We are looking for partners able enough to distribute and sell our products in beauty salons and train the beauticians as well as provide marketing services through all such distribution channels.” Pres-ent in more than 70 countries, the brand wants to set up a franchise chain with professionals in the beauty and personal care business who can provide value-addition. “In 2010 we embarked on a franchise business in France and as of today we have more than 300 units. Now we have beauticians coming to France and inquiring if they can open new beauty salons for our brand,” Belabed informs.
For almost all the new French brands, the first task is to establish a presence in Tier I cities. And to further their geographical reach, they would prefer to choose the omnichannel way. But what is most important is to impart the training so that their brand is not affected in any way. “We need specialists for this product and therefore the right kind of training is crucial,” says Geoffroy Vermeulen, Sales Director, Carré Blanc.
Elaborating about the polishing of skills required for his business, which deals with designing and distribution of home textiles i.e. bed linen, towels, bathrobes, table cloth, cushions, blankets, tableware, etc., Vermeulen says, “The training will pertain to how we use IT, how we promote the brand, and our approach to the customer.” Kunz Dry Cleaners, for instance, provides training through videos about how to dry clean the shirts or the specific process involved for trousers, etc.
“It can be disaster for the business if the person managing it does not have the experience to do technical machine work. We also give training in communication and marketing since they are different for France and India,” informs Sylvain Dizerens, the company’s CEO. In the case of Guinot Institut, it is the master franchise that will carry the brand’s knowledge and pass it to the franchisees. “We have this tremendous knowhow about professional cosmetics and this will be shared with the master franchisee who will then be responsible to train other franchisees,” says Belabed.