When the international retailers in mostof the countries are not faring well, they have been on a prowl for emergingand growing markets. Apparently, with around 20% annual growththat Indian retail has maintained even in difficult economic situation worldwide, India has become an attractive destination for the global brands. A yearafter the exit of brands such as Levi Strauss and Co.s Dockers range,Grotto SpA's GAS apparel and French lingerie label Etam, a new lot of fashionretailers are set to enter India with an eye on the wallets of affluentconsumers. Zara, the fashion label owned by Inditex SA of Spain, UK garmentchain Topshop, the Marc Ecko clothing line promoted by the US entrepreneurof the same name and the Japanese casual wear brand Uniqlo are preparing toopen outlets in India.


They are among two dozen fashion brands expectedto enter India this year to try their luck in an apparel market that AnandRaghuraman, a partner and director at Boston Consulting Group, estimates at Rs.1.3 trillion and expanding at a yearly 20%. "Moreover, over 20% of thisindustry, at Rs. 30,000 crore, is with the organized apparel retailers andgrowing at 20% per annum, making it an attractive destination for globalretailers," says Raghuraman.


Following the global meltdown, and as part of achange in its market strategy, Levi Stra uss phased Dockers out of the Indianmarket last year to concentrate on denimwear. GAS, introduced in India by Mumbai-based apparel retailer Raymond Ltd in a 50:50 joint venture with Grotto,shut its 12 stores. Etam ended its joint venture with Future Group.


The influx of retailers coincides with a growthrevival in India. Asia's thirdlargest economy grew 7.9% in the quarter endedSeptember, the fastest pace in five quarters. "There is a huge globalinterest in India," says Kumar Rajgopalan, CEO of Retailers Association ofIndia. Department store chain Shoppers Stop plans to launch the Playboy


brand and around six other international labelsin Indian market in the coming year, according to Boston Consulting Group. The S Kumar's group, through its unit Brandhouse Retails, will launch the. Italian apparelbrand Oviesse.


To be sure, not all the brands that vie forconsumers' cash in India will succeed, given their inexperience in a market inwhich preferences vary widely. "The year will see all kinds of brandslargeand nichesetting up here. But they will not all succeed in India as they won't understand the market," says Raghuraman. Zara stores will be openedin India under a February 2009 agreement between Inditex and Trent Ltd, theTata group's retail arm. "We will open five stores in New Delhi, Mumbaiand other major cities," Inditex's corporate communication andinstitutional relations division said. Marc Ecko will launch the brand in thecoming spring in a partnership with RPG Group's retail flagship Spencers RetailLtd, which plans to have in place at least five international alliances thisyear.


"We are talking to a lot of people fromsuper luxury, luxury to value and will collaborate with leaders," saysRaghu Pillai, Chief Executive Officer of Reliance Retail Ltd, the retail arm ofReliance Industries Ltd. The firm already has partnerships with retailers suchas Marks and Spencer Group Pic.


Barcelona-based maker of jeans and sportswearDesigual, which earns 300 million (Rs1,962 crore), or 85% of its revenue, fromEurope alone, plans to expand into Asia this year as it seeks geographicaldiversification. "Later this year, we will enter Japan and after that we may either enter India or China. But it is most likely to be India before China," said Nikhil Nathwani, who has the title market entrance at the clothierand is overseeing its Asia push. "We expect Asia, America and Europe to account for one-third each of our overall revenues in the next five years."



Originally published in The Stitch Times: April 2010