Can the Indian Market attract more International Brands ?

Gone are the days when International brands skipped India as a possible market for their products. The new Indian consumer is younger, highly informed and more international. With the highest number of youth in the world (356 million), and the emergence of a new class of affluent young Indians with great purchasing power, India is now an attractive market to invest in international brands.

Since there is a vast improvement in standard of living, young Indians don’t mind splurging on products, and the boom in technology (mobile and e-commerce) is leading consumers to demand for the very best there is to offer. The reach of the digital medium has surpassed anyone’s expectations, with small towns and Tier 2 cities spending more and having a penchant for international luxury brands.

Brands like McDonald’s, KFC, Starbucks, Dominos, Burger King, Dunkin Donuts, Menchies, Subway had all entered India through a franchise model and even though hundreds of international franchisors are already operating in India, there is scope for many more to step in.

Companies such as Korres, Migato, Evisu, Wallstreet English, Pasta Mania, Lush Addiction, Melting Pot, Yogurt Lab and Monnalisa, are slated to invest about $300-500 million in the near future.

Last year, India replaced China as the most promising retail market in the world, according to an AT Kearney report. Plus, the government relaxed the rules for foreign direct investment (FDI) last year, sparking interest on the part of several brands, including Sweden-based Hennes & Mauritz (H&M) and Ikea, Japan’s Uniqlo, American retailer GAP and Massimo Dutti.

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.

Looks like the Indian retail market has pulled up its socks to be a promising sector for many more International brands.