Asian Brands Make a Beeline for Indian Market
11 Nov 2019 - A surge of Asian retailers entering India over the last few years has given a fresh uplift to the modern retail market.
Buoyed with success of the likes such as Miniso and Uniqlo, at least seven niche Asian brands such as Udon Komadori, Lush Addiction, Seoul Garden, Killiney and Spice Box have lined up to enter into the most promising retail market over the next one year.
“A rapidly growing middle-class along with an increasing number of youngsters have allowed brands across the globe to penetrate swiftly in India more than in any other nation.
We expect at least 10 per cent growth in terms of brands entering India over the next one year as compared to a year ago,” Gaurav Marya chairman of Franchise India Holdings, a retail solutions provider that is helping these brands find partners and get regulatory clearance, told this publication.
While brands from Malaysia, Thailand, Hongkong, Taiwan and Japan are obsessed with the Indian market, Chinese and Korean brands are also now aiming at India as a lucrative market, Marya added.
The reasons are clear: the impact of US trade conflict has been a particular concern for investing in China recently. Secondly, the growing young shoppers keen on spending on western trends has also fuelled the interest of smaller global brands that rely on the franchise system for global expansion to tap the Indian retail space.
Further, consumer spending in the world’s sixth-largest economy is poised to grow from $1.5 trillion now to nearly $6 trillion by 2030, according to a report released by the World Economic Forum. The names don’t ring a bell— Mogu Mogu juices, Cornea chips, Kato fruit drink — but retailers say they are already seeing a spurt in demand for these brands in India.
These three Thai products are part of a range of items from South-East Asia that are increasingly showing up on Indian supermarket shelves.
With food and grocery retail just three per cent of the $641 billion retail markets, several global food chains sense an opportunity, including Hong-kong based Spice Box. In the fashion and apparel segment, too, India has already acquired a new taste for quirky Asian stores.
Brands such as China-headquartered retailer Miniso and Yoyoso, Korean lifestyle brand Ximiso, and Japanese retailer of household and consumer goods, Muji — all known to be low-cost retailers — have set foot in India to grow their business.
In fact, Miniso has won the hearts of consumers as well as mall owners, garnering more sales per square foot than anchor retailers and global fashion giants Zara and Hennes & Mauritz. Since its arrival in August 2017, Miniso claims to have generated sales of Rs 700 crore in its first year from 26 outlets.
Currently, it has 102 stores in India (24 Miniso- owned and 78 franchise stores) and plans to open 800 stores by the end of 2020. Japanese apparel retailer Uniqlo, known to make functional clothing, is gearing up to open its second outlet in India in November 2019, after it unveiled its first store in October.
Maintaining price remains a challenge
Carrying forth the mass-market and low-cost positioning from their home countries to India — a $670 billion retail market — remains a challenge for global brands.
“Any international brand tends to have a premium tinge in India even if it is a mass/midmarket brand in its home country. There are multiple reasons for this. Average household incomes in India are far lower than those in markets like Europe...” said Rajat Wahi, partner, Deloitte Consulting India
The New Indian Express