Blog: Leonie BarrieInditex eyes India

Leonie Barrie | 3 June 2010

Clothing retailer Inditex already has a vast global footprint - 4,607 stores around the world at the last count, 1,395 of which carry the Zara name. And it shows no signs of slowing down, with up to 425 new stores planned during 2010 - 95% of them outside its home market of Spain.

Of course this isn't surprising when you consider that international growth is key to bolstering sales as western markets continue to be buffeted by the aftermath of the recession. But what is perhaps startling is that this is the first time Zara has made a foray into India.

Inditex describes the opening of its first Zara store in the capital Delhi as "a new milestone" and is already planning to roll out more locations in the country's largest cities. Like many firms it is attracted by India's 1.1bn inhabitants - which make it the world's second most populous country - and, in particular, its rapidly-expanding middle classes, who are keen on fashion and up to date on international trends.

"The country has a dozen cities whose populations each exceed three million people, and the Indian market promises substantial growth potential for Zara's fashion offering," Inditex says.

The timing of its move coincides with new research that suggests clothing market demand in India is likely to grow at 16.8% per annum between 2009 and 2014 - outstripping the 10.9% growth forecast for Asia and Oceania as a whole.

But one of the biggest problems facing overseas retailers making a move into India is the need to find a domestic partner. Indeed, for its expansion into India, Inditex has formed a joint venture with industrial conglomerate Tata Group. 

Perhaps this is why it has waited so long before setting foot in the country. After all, Asia already accounts for 12% of group sales, with its first foray into the region beginning with Japan in 1999, followed by Singapore, Malaysia, Indonesia, Thailand, the Philippines, Hong Kong, mainland China and South Korea.


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