Category — Consumer Goods

India Eases Rules for Foreign Brands to Own Store Chains

The Government of India announced 100 percent foreign direct investment in single brand retail trade; global single-brand retailers will no longer need its permission to own and operate stores in the country. Earlier, overseas companies needed government approval to own more than 49% of an Indian retail operation, leading many to partner with Indian companies or rely on local distributors and franchises.

“Allowing foreign brands to directly invest in retailing in India will improve customers’ shopping experience and push Indian retailing companies to upgrade their services and offerings,” Ahmed Timoumi, a professor of marketing at the Indian School of Business said.

shopping-mall

The government also relaxed the norm of mandatory 30% sourcing requirement from India for the first five years. This will allow global retailers to come in with international merchandise without concerns of loss of quality and brand equity. Retailers can now start operations and will have 5 years to find Indian partners and vendors that qualify in terms of quality and price. After five years, the single-brand entity will be required to meet the 30% sourcing norm directly towards its India operation on an annual basis.

The relaxation of FDI norms in single-brand retailing in India will benefit companies that source goods from the country for their global operations. Per industry estimates, the Indian retail sector is projected to reach $1 trillion by 2020 at an estimated CAGR of 15 percent. India’s retail market is currently worth around $600 billion, Since organized retail currently accounts for just 8% of the market, India presents global brands with “tremendous scope for growth.”

January 11, 2018   No Comments

Amazon India to Launch Online Grocery Marketplace

With the Government of India’s approval to invest $500 million in its food retail business, Amazon India will soon commence its online grocery and food retail division. Amazon has almost doubled its authorized capital to $4.74 billion matching its earlier capital commitment of $5 billion made in June, 2016.

The company has already launched Amazon Now, an app to facilitate home delivery of food and grocery items from designated grocery chains. Currently, Amazon’s warehouses in India do not store food items to meet the Amazon Now demand, but will do so from March onward this year.

basket of vegetables

India’s online grocery and food retail market is set to witness more competition as Alibaba along with Paytm Mall is set to acquire about a 35% stake in hyperlocal grocery delivery startup BigBasket against an investment of $300 million. Flipkart is also aggressively looking to enter the food retail business in India.

January 11, 2018   No Comments

Sephora Expands Footprint in India

With demand on the rise for premium products in India, French beauty and cosmetics retailer Sephora, is increasing its outlets in India. Sephora India, a partnership between Moet Hennessy Louis Vuitton and India’s Arvind Ltd, operates through 13 company-owned stores across metros. It plans to add at least ten more stores in the next fifteen months to tap the growing market.

Chief executive of  Sephora India, Vivek Bali, says that a large number of customers are graduating from the value segment to premium cosmetics and grooming products.  Additionally, the increase in the number of women joining the workforce, along with the rise in purchasing power, are factors that drive growth in the segment. “If the overall market is growing at 18 percent, the premium end is growing faster at around 28 percent,” he said.

Sephora India Sales 2017 - Legend

Sephora’s India Business 2017

LegendThe country’s beauty cosmetics and grooming market, which is estimated at $8 billion, is growing at a compounded annual growth rate of 18 percent. According to trade body ASSOCHAM, India’s beauty cosmetics and grooming market is expected to touch $35 billion by 2035.

January 11, 2018   No Comments

Levi’s Consolidates S. Asia, N. Africa and Middle East Businesses

San Francisco-based denim corporation Levi’s merged its South Asia market operations with those of the Middle East and North Africa citing common consumer preferences and synergies across these markets. These three geographies account for $200 million in wholesale revenue, and form the fastest growing business unit within Levi’s globally. The Bangalore-based India unit of Levi’s reported a revenue of over $130 million as of March 2017, with a net profit of almost $9 million.

Levi's Logo

Levi’s India head Sanjeev Mohanty will spearhead the consolidated business. The Times of India reports that a company spokesperson confirmed the development. “Sanjeev has successfully led the South Asia region for over a year now, and we look forward to him bringing similar success, by driving growth and profitability, in this additional mandate as well,” the spokesperson added.

December 23, 2017   No Comments

Automobile Industry in India Grows 24% in November 2017

All segments of the automobile industry in India recorded double-digit sales growth in November ’17. Sales of passenger vehicles grew 14 percent, lowest among all segments, while those of motorbikes and scooters grew 23 percent. Sales of commercial vehicles were up by 50.4 percent.

A truck

Business Standard reports that according to data issued by the Society of Indian Automobile Manufacturers (SIAM), demand from India’s rural areas is driving sales for two-wheeled vehicles.  Vishnu Mathur, director general at SIAM, said, “In the goods carrier segment, trucks have grown mainly on enhanced spending by the government on infrastructure projects. However, the bus segment remains impacted, as government buying remains at a slow pace.” 

December 15, 2017   No Comments