Local ally key to success of global retailers

Finding the right local partner and merchandise mix is the key challenge faced by global retailers when they debut in India, according to international retailers.

"Local partner will give you a lot more in terms of expertise in marketing, sourcing and selling. Local partner will be of great help in understanding what product they can sell to Indian partners. If you have strong export base in Brazil, Russia, India and China (BRIC) countries, you can go ahead. But I don't recommend this," said Klaus N Hang, editor and publisher, Sportswear International.

Hang said almost all the international brands were waiting to enter the country. Besides restrictions on foreign direct investment (FDI), the process of deciding the right Indian partner and product mix is delaying their plans.

"BRIC countries are the prime target of every international brand. Everyone is jumping at Russia. Obviously, India and China are on their radar, next, due to the sheer size they offer," said Hang.

For Hang, emerging markets are like global warming, which the present generation was ignoring earlier.

"See, the global warming has already affecting us which we used to ignore, thinking that it will happen only after 50 years. Similarly, international retailers can not ignore India and China which are the biggest markets," said Hang, who has tied up with Images Multimedia to launch Sportswear International India.

Jeremy Delport Barret, head, international sales, Ansorg GmbH, said local partners will help in expanding business in logistics, finance and stores. Indian market may help Ansorg double its turnover this year, said Jeremy.

In fact, Jeremy is more bullish on India than China. "We are very optimistic on Indian market. Here everybody is talking of expansion in a big way. In UK, everybody is planning of 10 shops, but in India, people are talking of opening 100 shops. Nowhere this kind of opportunity exists," he said.

Jeremy knows India's potential better as his company has been supplying light fitting to big retailers like Pantaloon and Shoppers Stop, since last four years.

For Thorsten Allenstein, general manager, Triumph International, a lingeriewear manufacturer, cap on FDI is hindering their growth apart from red tapism.

"It took us one year to set up a factory here, whereas in China we opened a store in less than one and a half months. If FDI comes here everything including supply chain, prices, quality, cold storage will be streamlined. This restriction is preventing consumers from getting right merchandise and prices," he said.

On the notion of international retailers destroying local mom- and-pop stores, Allenstein said, "Those stores which have found their niche will definitely survive. It is only those who don't have proper strategy will sink."