NEW DELHI — Fast-fashion and contemporary brand retailers are flocking to India to tap into the nation’s rapidly growing economy and a market comprised of millions of young people.
The latest is Forever 21, which opened its first store in India at the Ambience Mall here late last month, with a long line of customers waiting outside, impatient for the doors to be thrown open.
The wait to open the store has also been a long one. “We’ve been looking for a location for the last three to four years,” said Alex Ok, the company’s president. “The Indian market is so important. It is the second biggest in terms of population, and it has been an important country for sourcing for the last five to six years and now also important for retail.”
Forever 21 joins the likes of Diesel, Zara, Ecko Unltd. and Italy’s OVS Industry. Zara opened three stores in India last summer, in Mumbai and New Delhi, all of which have drawn large crowds.
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Other brands that made their entry into India earlier this year include Vero Moda and Seven For All Mankind. Over the last few years, Promod, Calvin Klein and S. Oliver have been establishing their stake in the metro cities. Meanwhile, well-entrenched brands like Van Heusen still see room for substantial expansion. The company, which already has 100 stores in India, plans to add 250 more over the next two years and expects sales of 8 billion rupees, or $170.5 million, to 9 billion rupees, or $191.8 million, according to Shital Kumar Mehta, chief operating officer of Van Heusen. This is a division of Aditya Birla Nuvo Ltd., the Indian partner of Van Heusen. The brand has been forging a strong association with fashion, especially as sponsor of the men’s fashion week held in association with the Fashion Design Council of India in Delhi in late August.
What comes next? The entry of Gap is awaited, particularly in light of its plans to launch in China later this year. According to news reports, the Gap team was in India earlier this year, in exploratory talks.
They are all eager to tap into a market that some project will grow faster than China in years ahead. The Associated Chambers of Commerce and Industry (ASSOCHAM) estimates the Indian apparel market was worth 1.11 trillion rupees, or $23.65 billion, in March 2007, the latest data available. The report cites the Indian fashion industry as one of the fastest changing and most dynamic in the world. As consumers increasingly shift their focus toward fashion apparel, they’re more and more exposed to Western media, and fashion becomes widely available in shopping malls.
According to the report, the frequency of purchase is highest among younger consumers. More than 81 percent of India’s population is under 45, and these consumers are the most fashion conscious. However, women in the 41-to-50 age group are also big shoppers. The northern and western regions of India account for the highest rate of shopping for designer apparel.
Forever 21 has been brought to India by Dubai-based Sharaf Group, the master franchise for the retailer in Asia, which has helped Hello India, another local company, introduce Forever 21 in India. Since foreign direct investment is still an issue in retail (Indian regulations do not allow more than a 51 percent stake in monobrand retail stores), foreign firms have to look for the right partners to enter the market. The Delhi store has a floor area of 10,000 square feet and focuses only on the core women’s wear collection. At this time, the store has not introduced Love 21, Heritage 1981 or the men’s lines.
Diesel was launched in India last April and has been moving fast, with three stores already open in Mumbai and Bangalore. The brand launched its fourth store in New Delhi, which was also its first in northern India, in early September. Each of the Diesel stores has launched with a themed event and marketing buzz before the actual opening. Diesel has launched in India in partnership with Reliance Brands Ltd., which is a part of Reliance Industries Ltd. Group.
“When a new brand comes into the country, the first sense is of creating a buzz. It is clear that if you give the real experience, the Indian consumer is not shy of opening his wallet. We’re able to give the consumer this feeling,” said Darshan Mehta, president and chief executive officer of Reliance Brands Ltd.. “We are far exceeding our best estimates and are very happy with the financial results, even in these first few months.”
Italian brand OVS entered India in August with three stores in Bangalore, Mumbai and Delhi, all of which opened within a one-week period. The company broke into the market via Brandhouse Oviesse Ltd., a joint venture with Brandhouse Retails Ltd. and OVS Industry.
“The aim of OVS Industry is to bring a new fashion shopping experience to India which is made in Italy,” said Fabio Pampani, general manager of OVS Industry, a brand that has revenues of more than 870 million euros, or $1.19 billion at current exchange, and plans to provide “fast fashion” to India.
“We have the second largest population in the world, and a huge percentage of the population is under 25, which is perfect for us,” observed Anjani Kasliwal, general manager of luxury brands for Brandhouse Retails. “Our target group is 16 to 30 years old, and we’ve priced ourselves in the mid-category. We believe the brand is well positioned for the Indian market with a well-planned store size.”
There will be another three to four stores opening by March 2011. Brandhouse Retails has considerable experience in this field, having brought in other brands such as Reid & Taylor, Belmonte, Carmichael House, Stephens Brothers and Alfred Dunhill to India.
Ecko Unltd., the fashion brand from the house of Marc Ecko, launched for the first time in India in August, at DLF Promenade, Vasant Kunj. The 1,200-square-foot store has opened via an exclusive tie-up with Spencer’s Retail Ltd., which is a part of the 150.5 billion rupee, or $24.54 million, RPG Group.
“We are planning to expand across the country and are currently looking at the Delhi, Mumbai and Punjab markets,” said K. Dasaratharaman, president of speciality retail at Spencer’s Retail. “The company will spend 5 billion rupees [or $106.56 million] on the brand this fiscal year.”
Spencer’s Retail is already in the retail business, with more than 200 stores across segments ranging from food to home essentials, garments and toys.