Size and Growth of India's Health and Beauty Industry Attracts Top Global Brands From Sephora to TBS.

The world’s largest premium beauty products retailer is entering the Indian retail market. Owned by the €20.3-billion (Rs 1.33-lakh-crore) Louis Vuitton Moet Hennessy (LVMH), the world’s leading luxury goods group, Sephora is a trailblazer, with 1250-plus retail stores in 25 countries. Although LVMH’s financial reports do not give stand-alone figures for Sephora, expert estimates suggest that the French firm has worldwide revenues of between €4.3 billion and €5 billion (Rs 28,260 crore and Rs32,860 crore). Sephora.com is also regarded as the world’s top beauty e-commerce platform.

The €12.3-billion (Rs 80,836 crore) AS Watson Group (part of the Hong Kong-based €32.5 billion - or Rs2.13-lakh-crore — Hutchinson Whampoa Group) is the world’s largest health-and-beauty (H&B) retailer with over 10,000 stores in 33 markets worldwide. It is among the top three in 25 of them. It is also the largest H&B retailer in Asia, with 2600-plus H&B stores and 900-plus pharmacies in ten Asian markets. (Well, H&B is a term for skincare, beauty, grooming, wellness and other personal care products but excluding prescription medicines)

Another global biggie, The Body Shop (TBS), addressed India's Health Care Franchise through a franchisee in 2006. With sales of about €800 million (Rs 5,258 crore) from 2660-plus stores in 60 countries, TBS is part of the €20-billion (Rs 1.3- lakh-crore) L’Oreal (the world’s largest beauty company). Today, TBS has 80 operating stores in 28 Indian cities and has a target of opening 150 stores by 2014.

So what has prompted Sephora to enter India even without foreign direct investment (FDI) being permitted in multi-brand retail? Undoubtedly, it has to be the size of the Indian H&B market and the pace at which it is growing.

The Indian H&B market (products and services combined) was estimated to be worth almost Rs1.73 trillion (€26.6 billion) in 2011. It represents 3.7% of India’s private consumption expenditure of Rs46.7 trillion. The US market was estimated to be €78 billion (Rs 5.12 lakh crore) last year. On a per capita basis, consumption of H&B products and services in India is 8.5% of that in the US, while our per capita income is 7.5% of the US.

With an annual growth rate of almost 16%, the Indian H&B market will be worth Rs3.57 trillion (€54.9 billion) in five years. The organised sector accounts for Rs134 billion or just below 8% of the business. This is the very reason that many global research agencies such as Euromonitor and Mintel have gone horribly wrong in estimating the size of the Indian market. They haven’t taken into account facts like slum-dwellers in Greater Mumbai consuming Rs7.9 billion worth of H&B products alone.

The rich contribute about Rs320 billion (18.5% of the market) and the upper middle class about Rs414 billion (23.9% of the market). The middle class constitutes the largest chunk of the market at almost 35%. Consumption by men accounts for about 32% of the total market, or about Rs554 billion (€28.5 billion).

So what exactly are Indians spending on? It’s not just kajal (kohl paste) anymore! About Rs259 billion (15% of the market) is spent on smelling good, making fragrances (including deodorants) the single largest sub-category. Globally, fragrances account for 15.5% of the total market, so the Indian market for fragrances has caught on.In this segment, the richest 24.3% of Indians consume 98.4% of the products. Around 35% of fragrances sold in India (by value) are either fake or smuggled. Quite a large percentage also comprises products bought while traveling abroad.

Beauty services like haircuts, pedicures, facials, waxing and other treatments delivered at salons alone (excluding treatments at spas) is the second largest sub category at Rs238 billion (13.8% of the total market). Another Rs222 billion (12.8% of the market) is spent on cleansing, including soaps, facial cleansers, shower gels, face scrubs, body scrubs. Colour cosmetics constitute about Rs208 billion, shaving (hardware and software) accounts for about Rs128 billion, shampoos about Rs116 billion, oral care about Rs113 billion, hair oils about Rs110 billion and hair colourants about Rs90 billion. No wonder you have salon beauty franchises opening across India.

Was the Indian H&B market always so big? It has grown 20-22% per annum in the last five years. So the market was only worth about Rs670 billion (€10.3 billion) in 2006, but it was still large enough to attract The Body Shop back then.

Source: DNA March 7, 2012, Amit Bagaria:  Chairman of Asipac, India’s leading mall development managers and retail research consultants, and founder of Men & Boys, Asia’s largest chain of retail stores for men’s skincare and grooming products.

Tags: Sephora, Sephora Franchise, Watson Group, Beauty Franchise, The Body shop franchise,TBS franchise, L'oreal Franchise, salon franchise,


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Armani Junior Signs Fashion Designer Suneet Varma as Their India Master Franchise.

Designer Suneet Varma believes in keeping pace with the changing times. So he has turned into an entrepreneur and is bringing Armani Junior, a subsidiary of international luxury fashion label Giorgio Armani, to India.

"I have bagged the Indian franchisee for Armani Junior. I wanted to do something in luxury but I was sure it had nothing to do with shoes and bags. Then I zeroed in for children's wear, as it is a niche segment and there is tremendous scope in this area," Varma stated.

"We had approached them in March, met in May and finalised the deal in July. I have already been to Italy to have a look at the stock we would be keeping at the India store," he added.

The Delhi-based designer has opened a private firm, Unique Eye Luxury Apparel Pvt Ltd, along with a few partners and has signed a three-store deal with the label.

Their first store will open in luxury mall DLF Emporio, Vasant Kunj in March next year.

For the designer, who has been in the industry for over two decades, the decision came naturally as he believes creativity lies not only in making good clothes, but in exploring business avenues as well.

"I have been in this business for 25 years and I have good knowledge about the retail space in the country. So we understand the mindset of people and the market condition. And it is a business which one has to understand from the core and fortunately, my experience in the industry gives me an edge over others," said Varma.

"The idea is to think a little bit ahead and be creative about your business. For me, creativity goes beyond making creative saris or dresses. Yes, there is different fun in this, but one has to be creative enough with the business ideas as well to grow in this field," he added.

One of the pioneers of the Indian fashion industry, Varma wants to ensure this project is equally creative like his designs. Hence the store would be more than just a regular kids' wear shop.

"We have got big space. We want to make it a concept store. So we have plans to have regular art appreciation, music appreciation classes for kids here. We are also planning to bring in theatre personalities to interact with the kids," he elaborated.

"So yes, I am quite excited," he signed off

Source: prokerala, Tue, Nov 29 2011

Tags:Suneet Varma, Armani Junior, Unique Eye Luxury Apparel Pvt Ltd, Children Franchise, Kids wear franchise, kids apparel franchise,


This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.

Iconic US Jeweller Tiffany Could Enter India Thru Reena Wadhwa

Iconic US jeweller Tiffany & Co is in talks to enter India through a 51% joint venture with actress-turned-luxury entrepreneur Reena Wadhwa, who already has a joint venture with Italian luxury brand Gucci, a person familiar with the negotiations said. "The deal is on the table now and could be signed soon," the person said.

Reena Wadhwa, who is married to investment banker and Ambit Group CEO Ashok Wadhwa, will float a new venture to run Tiffany's business, the person said.

Wadhwa confirmed she has been in talks with Tiffany's, but said nothing has been finalised. Tiffany & Co Vice President, Emerging Markets, Laurent Cathala said: "We have been pursuing discussions with potential partners and will announce the details of a business structure in India when we have finalised our plans and have signed the appropriate agreements."

Started as a stationery and fancy goods store in New York in 1837, Tiffany's is today the world's second-largest luxury jewellery retailer behind Chinese jeweller Chow Tai Fook, operating around 230 stores world over.

During its long history - Tiffany's will complete 175 years in September - the jeweller helped shape American culture including creating a design for the Union Army that would become baseball team New York Yankees' "NY" logo.

The company is fighting falling sales in the US and most European countries. During the festival season, better sales in Asian countries helped Tiffany's post a 7% rise in worldwide sales.

The company's management recently identified India as one of the key markets for the future. "We view India as an attractive long-term growth opportunity for Tiffany's," said Cathala, who heads Tiffany's emerging markets business, which covers the Middle East, Gulf countries, Europe, Africa, Turkey and India, and is based in Dubai.

Tiffany's is hoping to capture a pie of the country's $5.8-billion luxury market, which is expected to grow more than 20% a year to $14.7 billion by 2015.

Cathala is leading Tiffany's negotiations with Wadhwa being held out of Dubai, said the unnamed person quoted earlier.

Wadhwa had converted her company Luxury Goods Retail Pvt Ltd into a joint venture with Gucci in 2009, with the Italian firm holding 51% share. Gucci ended a franchisee deal with the Murjanis to form the joint venture.

A number of luxury brands have set sights on India as the luxury market is growing more than 20% a year. With the number of high net worth individuals increasing and aspiration levels of the young consumer class rising, the potential is big.

India has three million affluent households, defined as those with more than $100,000, or more than 50 lakh, of investable surplus, according to a global affluence study by research firm TNS.

The Indian government had recently allowed 100% foreign direct investment in single brand retail, but with a rider that retailers having more than 51% FDI will have to source at least 30% of their products from Indian small and medium enterprises, or those firms having invested not more than $1 million, or over 5 crore, in plant and machinery.

Sniffing an opportunity, real estate developers are expected to add more than one million sq ft of exclusive space for luxury retail over the next two-three years across the country.

Tags: Tiffany franchise, ambit group, reena wadhwa, laurent cathala, chow tai fook, luxury goods retail pvt ltd, gucci, murjanis,


This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.

Worlds Finest Luxury Retail Brands Lined Up For India, In Anticipation Of Relaxed FDI Norms.

The coming months could see a slew of high-end global fashion brands entering the $4.6 billion (around R20,700 crore) Indian luxury market, through partnerships with domestic retailers like Reliance Brands, DLF Retail Brands and others.

According to industry sources, Italian luxury apparel player Emilo Pucci, designer handbag manufacturer Krizia (also from Italy) and American high street casual wear brand Brooks Brothers are likely to set up operations in India soon. They’re in talks with DLF and Reliance for inking joint-venture partnerships.

International brands are riding high on hopes of relaxed foreign direct investment (FDI) norms that could see a nod for increased foreign capital in single-brand retail and opening up of FDI in multi-brand retail.

Sources indicate that American luxury department store Bloomingdale’s, specialty store Neiman-Marcus and haute coutre brand Saks, will also enter the Indian luxury market that is growing at 15-17 per cent and is tipped to touch $14.7 billion by 2015.

DLF Retail and Reliance Brands have been most aggressive in tying up with upscale foreign brands, observe experts. Sharad Mehra, SVP, fashion & apparel, Technopak Advisors said, “DLF, with its abundant and upscale retail space, offers a great proposition to the prospective brand and Reliance has the scale and capital to grow these brands.”

Reliance Brands, which has a tie-up with high-end players like Diesel, Timberland, Paul & Shark, Quiksilver and Steve Madden, intends to rope in more international brands. Darshan Mehta, president & CEO, Reliance Brands said, “There are many fashion brands in the pipeline, both in menswear and womenswear.” However, he refused to name them owing to a non-disclosure agreement. Sources add that LVMH's Sephora, prominent beauty retailer and high-end women’s clothing brand Bon Chic Bon Genre (BCBG) from France are in talks with the company. Whether the partnership will be a JV or a license agreement couldn’t be confirmed.

Sources indicate that Swedish fashion retailer Hennes & Mauritz (H&M) is planning an India foray and has held talks with DLF Brands among others. However, an emailed questionnaire to DLF didn't elicit any response. The company, which has a franchise agreement with Italian high street fashion brand Alcott since 2008, is likely to convert that into a JV. DLF also has a collaboration with menswear brand Boggi Milano, that holds a 30% stake in the company.

Delhi-based Blue Clothing Company which operates a host of luxury brands in the fashion and home décor segments, introduced Turkish brands Damat, ADV and Tween to India earlier this year, and is also in talks with other foreign players.

Despite the heightened activity in the luxury space, retailers believe that high customs duty on goods and the dearth of luxury shopping destinations in India, act as deterrents to the growth. Mehta added, “Foreign brands are keen on entering the market but they're apprehensive about suitable locations. High-end brands refuse to set up stores in crowded streets or ubiquitous malls.”

Source: Financial Express.

Tags: Indian luxury market,luxury retail,Emilo Pucci, Krizia, Brooks Brothers,bloomingdale, neiman marcus,saks,diesel, timberland, paul and shark, quiksilver,steve madden,sephora, bon chic bon genre,

This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.

Promod To Acquire Majority Stake In Major Brands India. Eyes 1000 Cr T.O. By 2015.

Major Brands (India) Pvt. Ltd, the local franchisee for fashion apparel and accessories brands such as Mango, Aldo, Charles & Keith and Nine West, will form a joint venture with French womenswear retailer Promod.

This changes the existing franchise agreement between the two. Both firms will raise their investment in the brand locally, said Kamal Kotak, country head, Major Brands. Promod will hold a 51% stake in the venture and Major Brands the rest.

India has nine Promod stores, and contributes less than 3% of the brand’s global revenue. The venture will set up 40 stores in the five years, with contributions from the region expected to account for 15-20% of Promod’s global revenue, Kotak said.

The venture will also explore opportunities to raise sourcing from India for Promod’s global operations of more than 900 stores. It may also consider price cuts in India.

In the past, brands such as Marks & Spencer and Ermenegildo Zegna have changed from franchisee operations to joint venture partnerships. Both the brands have tied up with Reliance Retail Ltd. Marks and Spencer, which entered India in 2001, also cut prices by around 30% and started sourcing from the country when it formed its venture with Reliance Retail in 2008.

In the past three-four years, the business model has changed for such businesses, said Devangshu Dutta, chief executive officer, Third Eyesight, a consulting firm focused on the retail and consumer products sector.

“Earlier in the 1990s, the preferred route to enter India was (being a) licensee as import duties were high,” he said. “Then, in the last decade, it changed to franchise, and in the last three-four years, it’s a joint venture as India becomes a strategic market for global marketers.”

Major Brands has 80 stores and a portfolio of 10 brands across women’s fashion, footwear, accessories and kids apparel, Kotak said.

“By 2015, the company plans to have 500 stores and revenue of Rs.1,000 crore,” he said. For fiscal 2011, the firm’s revenue grew 40% to Rs.200 crore. Kotak declined to give details on profit made by the privately held firm.

“Over the next 12 to 18 months, we will add four-five new brands to our portfolio,” said Kotak, who is in talks with some 10 European and US brands that are looking at an India presence. He didn’t name any of them.

Major Brands launched its apparel brand Queue Up late last year. It will launch kidswear brand JFK later this year. On average, the investment for a 1,500 sq.ft store is Rs.80 lakh to Rs.1 crore.

“In next 12 months, we will invest Rs.50 crore for expansion,” said Kotak. The capex will come from promoters’ equity and bank debt.

Earlier in the year, Spanish brand Mango appointed DLF Ltd as another franchisee as it sees opportunity for growth. Mango, which contributes close to 25% of Major Brands’ revenue in India, has tripled the number of stores and turnover in the past five years. “We believe that India will be within our top 10 countries in terms of turnover in 2015,” Daniel Lopez, managing partner and deputy general manager of Mango, said in an email. Globally, Mango has 1,400 stores and a revenue of €1.27 billion.

Source: Live Mint . Com, Sapna Agarwal, 26 May 2011.

Tags: Aldo India Franchise, Charles And Keith India Franchise, JFK, Kamal Kotak, local franchisee, Major Brands India, Mango India Franchise, Nine West India Franchise, Promod Franchise, Queue

This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.

India Offers Great Business For Luxury Brands Licenses/Franchises. Top International Brands Re-Work India Retail Strategy.

The recent report 'World Investment Prospects Survey 2009-2012' has ranked India second in global foreign direct investments in 2010. Further, it says India will continue to remain among the top five attractive destinations for international investors from 2010-12. And even though the issue of allowing FDI in multi-brand retail is still being debated in the country, nearly a dozen global fashion brands are waiting to open shop here. Some are already in talks with domestic players for distribution arrangements. British clothing brand Jack Wills, Italian Rifle Jeans, American fashion designer Michael Kors are some big names likely to enter India soon, following licensing agreements with local partners.

Indian regulations allow 51 per cent FDI in single brand retail while no foreign investment is allowed in multi-brand retail. However, many fashion brands prefer the licensing route. Under this, the local retail partner invests in branding, marketing and expansion. As Abhay Gupta, Executive Director, Blues Clothing Company who has licenses for many top global brands in India avers, “If a brand enters directly, it would benefit in terms of financial muscle. While a franchisee would have his own limitations, own growth plans, and his own structure. Sometimes there may be a mismatch between the growth pattern presented by a franchisee and the growth pattern demanded by a brand. That’s where the discontent arises.” Gupta should know as Blues Clothing Company retails brands like Cadini, Versace, John Smedley among others.

Abhay says there is no set rule that brands should enter through the franchisee route. There have been both successes and failures of the franchise route and joint ventures. Similarly there have been failures of direct entries with sleeping partners and successes too. “But we have had two methods working for us. One is the franchise and the other is the license route. And we have done well in both. We have five stores per brand. No brand would grow from one to five stores if they were not satisfied with us as a partner. And we would not invest in five stores if we were not satisfied with the brand.” What works is that India contributes to global sales of these brands.

Ashish Dhir, Associate Vice President, Technopak Advisors, agrees there is a huge market for luxury apparels in India. The growth rate of the luxury segment is more than 20 per cent. Luxury brands are entering India. And in Delhi and Mumbai we have enough retail spaces for them.” According to experts, the luxury branded clothes market is pegged at Rs 2,000 crores or 10 per cent of the overall organized branded garments market in India. It is growing at over 30 per cent year-on-year, making India an attractive destination.

And the list of brands now wanting a foothold in Indian market is growing. For example, Jack Wills, a UK-based brand, is following the licensing route and will be available in metros. Rifle Jeans which entered India in 2006 but did not make a mark has been relaunched through a new local partner. As Dipak Agarwal, CFO, DLF Brands points out, “The business of retail fashion brands is worth $3 billion in India, out of which these luxury brands can easily capture half-a-billion dollars in next 3-4 years, provided they put in the right strategy.”

However, many brands already present in India have had to rework their marketing and retail strategy. The buzz is the likes of Calvin Klein, DKNY, and Hugo Boss are on the lookout for new retail arrangements while Gas wants new distributors. Diesel and Italian brand Miss Sixty which switched partners — Diesel switched from Arvind Brands to Reliance Brands while Miss Sixty did the opposite— are again looking around to add more distributors. Ditto for other luxury brands including Mango and DKNY (currently with DLF), and Brioni among others. Agarwal is clear that DLF’s arrangement with DKNY will continue. “They continue to remain with us. Rather, we are aggressively building up stores for them and are looking forward to opening a few soon,” he opined.

Tags:Jack wills, Rifle Jeans, Michael Kors, licensing agreements, Cadini, Versace, John Smedley, Diesel, Calvin Klein, Hugo Boss, DKNY, Miss Sixty, Brioni, retail business, luxury retail in India

Source:fashion united may 25.


This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.

Italian Fashion Franchise Brand Alcott Plans JV with DLF Brands To Open 20 Retail Outlets and Sourcing From India.

NEW DELHI: Italian fashion brand Alcott that had inked a franchise agreement with DLF Brands to enter India in 2008, is mulling to convert their partnership into a joint venture.

"We are happy with the brand's (Alcott) performance in India and wish to grow here. Currently, we are talking to DLF to set up a joint venture in the country," Alcott Founder Salvatore Colella told PTI.

He said the plan is to convert their franchise agreement into a JV , wherein DLF will have the majority shareholding and Alcott will be the minority partner. Indian law allows only 51 per cent FDI in single brand retail.

He said India would be the first country where Alcott is looking at a joint venture and plans to open more big stores, which are larger than its existing ones.

"In Italy, all operations are company managed and in rest of the countries we have franchise run operations. Given the potential for growth in the Indian market, we wish to have a joint venture here," Colella said.

Alcott brand was born in Italy in 1990 and has presence in over 12 countries. It focuses on casual fashion targetting youth.

The brand entered India with DLF Brands in December 2008 and currently has 12 standalone stores and three shop-in- shops here.

"We intend to open 10 stores every year here. By the end of this year, we will have 20 stores in India," Colella said.

The firm currently imports merchandise from Dubai. However, it plans to start local sourcing not only for the Indian market but also to export to other countries.

"By next year we have plans to start sourcing products locally from India not only for the stores here, but also for those located outside India, especially cotton products," he added.

Alcott's global annual turnover is currently estimated at 200 million Euro, with Italy alone contributing 50 per cent.

"In the next 5-6 years, we expect to have a turnover of 50-60 million Euro in India," he said.

DLF Brands, a part of real estate giant DLF Ltd has several brands in its portfolio, including Mothercare, Sunglass Hut, Boggi Milano and DKNY.

Source:ET,20 FEB, 2011, 11.15AM IST,PTI

Tags:alcott, alcott franchise, DLF Brands, salvatore colella, casual fashion franchise, mothercare franchise, sunglass hut franchise, boggi milano franchise, dkny franchise,


This Blog/Information/News Item/Press Release has been posted by Sparkleminds, A Franchise Consulting Company Based at India, Offering Complete Franchise Solutions Nationally and Internationally for more than a decade now.We help retail brands franchise and retail businesses expand to various geographies across the globe through our franchise development and franchise recruitment modules.If you are an entrepreneur seeking a international retail franchise we can help you evaluate and start a new franchise.Visit www.sparkleminds.com for more details on how you can either expand your existing business through franchising or start a new business.