Blog: M&S sees Indian incentives
Leonie Barrie | 21 April 2008
British high street stalwart Marks & Spencer is counting on India to help fuel its future growth. And advisedly so. India is a developing market with a growing middle class, and according to one figure I’ve seen can expect its retail industry to nearly double in size by 2015 from about $350bn.
Crucially, M&S already has strong Indian following for its brand, which has been available since 2001 through 14 franchised outlets operated by Planet Retail.
As part of its new joint venture with local group Reliance Retail, M&S plans to open 50 stores in Indian cities selling clothing and homeware. It also intends to keep an eye on costs by sourcing many of these products from local suppliers.
Under Indian law, foreign companies selling a single brand can own as much as 51% of an Indian store chain, and other western retail giants currently planning their assault on the market include Wal-Mart Stores Inc, Carrefour and Tesco.
"India is now quite ready for the retail experience", is how Rajan Bharti Mittal, managing director of Bharti Enterprises, which is preparing to launch wholesale cash-and-carry centres with Wal-Mart, put it at the World Retail Congress in Barcelona earlier this month.
M&S has made no secret of the fact it wants to grow its international business to 15-20% of group revenues within the next five years. Last month it set up a joint venture with retail partner COMS to expand in Central and Eastern Europe, and in February established a similar arrangement with Greek chain Marinopoulos.
As pressure increases on UK consumers through rising mortgage, food and fuel bills M&S is probably wise to look abroad to grow its profits – particularly in untapped emerging markets.
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