Category — India Market Expansion

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

India’s Stock Market Raises $11.6 Billion in 2017

153 initial public offering hit the Indian stock market in 2017, raising $11.6 billion according to an industry report. The report added that the market “looks good” for 2018 as well. The stability of the political landscape in India with continued focus on reform agendas by the government and significant tax reforms in the United States is likely to trigger another wave of strong growth in the capital market to enjoy a preferred position in terms of capital allocation by investors.

“The Indian IPO market in particular looks good for financial year 2018 with the return of foreign institutional investors and strong investor sentiment creating a bullish investment climate,” said Sandip Khetan, partner and national leader, Financial Accounting Advisory Services, EY India.)

Magazine with Investment Report written on it(Key highlights of the report as shared by PTI News🙂

  • 2017 saw the highest deal numbers and proceeds on record, reflecting the country’s economic strength and rising investor appetite
  • The fourth quarter of calendar year 2017 saw 22 IPOs reaching the market, an increase of 47 percent quarter-on-quarter (Q-O-Q) in terms of number of deals
  • Emerging markets contributed strongly to overall IPO performance, with both the Bombay Stock Exchange and India’s National Stock Exchange recording a 74 percent increase in deal numbers in 2017
  • The largest IPO was by General Insurance Corp of India worth $1.7 billion
  • In the Europe, Middle East, India, and Africa regions (EMEIA), the Bombay Stock Exchange and stock exchanges dedicated for trading shares of small- and medium-scale enterprises recorded the highest proceeds worth $5.5 billion through 17 IPOs
  • The top three sectors by highest number of IPOs in the EMEIA region are technology, industrial goods, and financials
  • The combination of primary market growth and overall economic growth is set to make India a highly attractive emerging market for investments in the coming months

 

December 24, 2017   No Comments

American Tower Corp Evaluates Additional Assets in India

Having bought Vodafone India and Idea Cellular’s 20,000 cell phone towers in India in November for $1.2 billion, Boston-based American Tower Corporation will evaluate more tower asset acquisitions to grow operations in India.

James D. Taiclet, chairman and chief executive of the company, said that his company’s near-term focus would be integrating the captive towers recently acquired from Vodafone and Idea into its existing portfolio. However, going forward, it may “seek to acquire additional assets in India depending on their characteristics and return potential,” given the tower company’s significant “financial resources, local market knowledge and experienced management team.”

Telecommunication Tower

The acquisition of Vodafone India’s and Idea Cellular’s towers brings American Tower Corporation’s India portfolio to nearly 80,000 towers, at third place behind Indus and Bharti Infratel, which own 123,000 and 91,000 towers, respectively.

Taiclet also expects the rapid consolidation underway in India’s telecom industry to be ‘a net positive’ for the country’s entire towers industry, reports the Economic Times.

December 17, 2017   No Comments