More than 500 brands, including 300 from the US, are waiting to venture into the Indian market through franchising, while more than 800 foreign brands are actively into it.
According to Sachin Marya, chief executive officer of Franchise India Holdings Ltd (FIHL), around 350 brands from the US and 200 from Australia are keen to have their presence through franchisees. Several other brands from Europe and south-east Asian countries like Malayasia and Singapore are also interested.
Estimated at Rs 10,000 crore, the franchise industry has about 1,500 home grown franchisers. According to FIHL estimates, the franchising market is growing at 30%-35% now.
Marya said, "India is now the world's second largest franchise market and sectors such as retail, food, information technology and education set to witness a boom in franchising."
According to him, half of the retail boom would be through franchising. "It would open up new opportunities for the kirana shops. They have the localities and the client base. All they need is to upgrade them."
Marya was here to attend the 'Franchise & Retail Opportunities 2007', one of Asia's biggest franchise show, in Kolkata. According to FIHL, India ranks first, ahead of Russia, in terms of emerging market potential in retail and is deemed as a 'priority-one' market for international retail.
The companies prefer franchising as it spreads business and risks while giving high-value income. Moreover, freedom from staffing and operational involvement gives them more chance to invest in research and development.
"In India franchising has great potential as the franchisers have minimum risks," said Marya.
As the retail business in India is trying to move from 3% under organised sector to 5%, it opens up huge opportunities for franchising. "Franchising being a relatively nascent concept in India, there has been a lack of information and knowledge. It would grow at 40% in next few years," he said.
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