India is seeing an explosive growth in retail and the engine for this growth is the mall. But there are huge challenges in terms of rents, availability of front-end staffing, increasing competitiveness because of more brands coming into the market and reducing maneuverability, shortening of the fashion cycle – in short, sustainability.
Director and CEO, Torero Corporation, Yashovardhan Gupta says, “India is a fantastic market. Everyone is just focusing on other markets, not realising the massive opportunity that exists here. India is a nascent and virgin market. Iconic brands like Starbucks and Suzuki always attempt to create cultural change. Whereas, in other markets it is very hard to create cultural change. India as a market has not had the opportunity to experience many brands and for the first time international brands actually have the opportunity to punch above their weight.”
He further adds, “India lacks in infrastructure, malls where you can present your brand in the right manner. Real estate has been struggling, retailers have been struggling. Only the early entrants get the best deals and the best locations. Apart from this, India has a lot of energy. But still it can be considered as a better risk reward scenario and one can be well-assured of their investments in India.”
The new consumer is younger, better informed and more global. With the emergence of a new class of affluent young Indians with great purchasing power, India is now a lucrative market to invest in for international brands. A large portion of these young consumers want to define their own rules and are open to experimenting.
MD, Woly, Ketan Vyas says, “The competitior for us was the consumer’s mindset which did not perceive that there is an opportunity and a certain product can be at a premium price and yet offer astounding value to the Indian consumer.”
There is a vast improvement in standard of living, factors like price consciousness has decreased, and the advent of technology (mobile and e-commerce) are leading to consumers demanding latest trends and products at par with the world’s best. The reach of the digital medium is far and wide, and has been a key factor in increasing the awareness of the international luxury brands in India.
Linificio E Canapificio Nazio, Maurizio Colzami says, “Not only the size of the Indian market is impressive but also there is a local demand that is not only copying what other markets are doing but also the local taste is growing in the market and I think it is interesting to follow because once this growth is established in the market, it will be a growth of the continent and not a growth of a small size country and that can have an impact worldwide.”
The presence of foreign retailers is only going to rise in India, given that many brands have already expressed their intention to start operations here. This will make churn all the more necessary and rewarding. Already, mall developers have gone ahead and bought-out contracts of brands in order to accommodate a more premium brand.