India fashion retail industry, accounting for 10% of the country’s Gross Domestic Product (GDP), has undergone a profound transformation in the past decade. Key growth factors behind the fast-growing fashion retail industry in India are rapidly growing middle class population, increasingly powerful manufacturing sector, burgeoning eCommerce industry, and rising purchasing power of consumers. Indian fashion, known for its cultural heritage, vogue of handcrafted garments and elegance, is making a surge into the global scenario with dynamic conventions, covering wide range of ornate clothes designed for wedding ceremonies to casual wear. From Crewel to Chanderi, Zardosi to Kanjivaram, Jamdani to Bandhini, many Indian traditional techniques of embroidery are paving way into the international market.

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The liberalization of India’s retail FDI policy has encouraged the arrival of acclaimed fashion stores and foreign fashion brands. The policy requires brands to source at least 30% of products from domestic industries, which does not seem to be a constraint for international retailers due to the presence of many vertically integrated medium and small-scale industries. Hence, global fashion companies like GAP, Zara, Uniqlo, Levi, H&M, Armani, Forever 21, Tommy Hilfiger, among others have entered India are taking advantage of the country’s expanding consumer base and market potential. The global brands have witnessed strong acceptance from Indian consumers across all geographies, owing to increasing disposable incomes, growing exposure to international events and fashion icons, and rising confidence levels.

The boom in fashion retail is opening doors for franchise opportunities in India for both domestic companies as well as international brands. Being influenced from social media, consumers are largely willing to wear apparels from international fashion brands and franchising play a very important part in the whole value chain. Many emerging international fashion brands are also eyeing the Indian market to expand their business and reach potential customers. Franchise models provide a proven business model with built-in pricing and marketing, which improves the chances of success in a new market. Fashion retail franchises can be quite profitable as many emerging brands can cost less than $500,000, but they can give you returns in millions.

Recently, Reliance Brands entered into a multi-year franchise agreement with retail Italian luxury lifestyle firm Tod’s in India. Although Tod’s has been operational in India since 2008 with mono-brand stores, entering into the franchise provides the luxury company an opportunity to enhance their brand’s potential and strengthen its digital presence. American high-street fashion brand, American eagle is also planning to expand its franchisee stores and take the count to 50. Recently, CK Jaipuria have signed a franchise deal to set up 100 retail stores of Adidas in tier-2 and tier-3 cities by 2024. Hyderabad based ethic retailer Sai Silks Kalamandir has also planned for expansion by taking the franchise route to strengthen its retail presence, especially in south Indian states by adding 25 new stores.

In this journey, PruVisor Consulting, a leading India market entry consulting firm, has also signed a long-term agreement with DAN JOHN, a leading Italian men’s fashion brand to help them grow in India through franchise partner.

Franchise opportunities for fashion retail brands in India are immense, given the sheer geographical size and diverse culture. With franchisee, the business can have a better local connect, which can lead to a great proposition. Entrepreneurs can have a better sense of ownership and control of operation with franchising. Besides, the current laws provide adequate protection to foreign franchisors in the event of emergency legal issues.

Fashion retail sector is projected to be worth around USD88 billion, with leading fashion companies such as Arvind Group, Madura Fashion and Lifestyle, Raymond Apparel, Reliance retail, Future Group, etc. launching their own labels to add new consumers. Not only private labels, but luxury designer labels such as Sabyasachi Mukherjee, Masaba Gupta, Manish Malhotra, Ritu Kumar, Tarun Tahiliani, etc. are also earning substantial profits as they are gaining prominence in the domestic and international markets.

Currently, 45-60% spaces in malls are acquired by the fashion retail brands. In the recent years, many premium and high-end ethnic and fusion brands have emerged and expanded aggressively across the country. There is a regular churn in prime shopping malls to accommodate newer global and high performing fashion brands due to increasing demand by customers. Established fashion retailers are also exploring franchise opportunities in tier-2 and tier-3 cities to grow further by expanding customer base. Moreover, many fashion brands are also opening up ‘experience stores’ and exploring new formats to capture the attention of potential customers and sustain in the highly competitive market since interactive and enhanced customer experience is the key to success in fashion retail.

Rise of eCommerce channels such as Flipkart, Myntra, Amazon, Ajio, etc. have opened a world of options for customers. The rising penetration of Internet and growing smartphone adoption have led to the astounding growth of eCommerce in India. Fashion and apparel brands are making the most of tech-savvy population in India and are selling their products on these platforms for enhanced profitability. Most of the popular fashion retail brands such as Allen Solly, Zara, H&M, Raymond, etc. have their own online shopping platforms where customers can choose the desired item and have it delivered at their doorstep. Moreover, sports retail fashion brands are also growing at a fast pace, owing to enhanced focus of population on going to gyms or engaging in outdoor activities for better health.

The startup ecosystem has led to the emergence of many fashion brands that do not have physical stores and are making sales through online channels. Social media has become a primary source for small-scale and emerging brands to advertise their apparels and accessories online and reach out to customers without making any substantial investment to promote it. In many ways, fashion brands are closely related to lifestyle in many aspects. Thus, the platforms work as an effective medium to help customers find things for a social setting when combined with social media. Brands are rapidly collaborating with influencers to reach more audiences and build loyalty.

Fashion retail brands in India are leveraging technology to enhance the in-store experience with digital marketing displays and improved checkout to enhance the overall experience of the customers. E-commerce players are shifting towards artificial intelligence solutions to capitalize on the rising trend of personalization, which has taken the fashion retail industry by storm. In the coming years, more international brands are expected to crop up in Indian as they are looking for ways to capture the large young population, which would only contribute to the growth of fashion retail industry in the country.

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