Franchising Conference


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Franchising Conference

  1. 1. 21 st Franchising Conference 20 th October 2006 Milan Presented by Arun K. Khetan FAI - INDIA
  2. 2. <ul><li>5,000 year old ancient civilization </li></ul><ul><li>325 languages spoken – 1,652 dialects </li></ul><ul><li>18 official languages </li></ul><ul><li>29 states, 5 union territories </li></ul><ul><li>3.28 million sq. kilometers - Area </li></ul><ul><li>7,516 kilometers - Coastline </li></ul><ul><li>1.3 Billion population. </li></ul><ul><li>5600 dailies, 15000 weeklies and 20000 periodicals in 21 languages with a combined circulation of 142 million. </li></ul><ul><li>GDP $690 Billion. (GDP rate 8.5%) </li></ul><ul><li>Parliamentary form of Government </li></ul><ul><li>Worlds largest democracy. </li></ul><ul><li>Worlds 4th largest economy on PPP terms </li></ul><ul><li>World-class recognition in IT, bio-technology and space. </li></ul><ul><li>Largest English speaking nation in the world. </li></ul><ul><li>2 nd largest pool of scientists and engineers in the World. </li></ul>INDIA
  3. 3. Franchising – Current Indian Scenario <ul><li>Franchising in India growing at 25% - 30% pa </li></ul><ul><li>Franchising accounts for 3% of India’s retail </li></ul><ul><li>Estimated Franchising market is approx €2 Billion </li></ul><ul><li>Approximately 1000 Franchising systems are already operational in India. </li></ul><ul><li>India is witnessing Retail Revolution. </li></ul><ul><li>No dedicated legislation but Govt. has announced to have one shortly. </li></ul>
  4. 4. Indian Economy <ul><li>India is today an Economic power house..,with economy growing @ 8% and expected to grow @ 10% in the years to come. </li></ul><ul><li>India is 4 th largest on PPP terms and expected to be 3 rd largest on GDP by 2050 – Goldman Sachs </li></ul><ul><li>With $650 bn market cap, India is the largest emerging market after Korea. </li></ul><ul><li>Service Industry approx 54% of GDP, with Indian GDP almost doubled over last decade.. </li></ul><ul><li>A country of billion plus with growing PPP, almost grown 10 times in the last decade. </li></ul>
  5. 5. Indian Economy <ul><li>Expansion of Service Industry (a gender unbiased industry) resulting in more & more working women, hence larger population contributing towards GDP. </li></ul><ul><li>An estimated $311 bn spend on Infrastructure over FY 07–12 will further spin off the pace of economic growth </li></ul><ul><li>Internet and technology changing the way of life, Globalization at its peak leading to re-alignment of transborder socio-economic relationship. </li></ul><ul><li>Many of fortune 500 companies are setting up their R & D bases in India. </li></ul>
  6. 6. How to Develop Franchising In India <ul><li>Initial Target segment Identification & market survey </li></ul><ul><li>- Networking with Franchising Associations </li></ul><ul><li>- Participation in Expos, Seminars & Retail Exhibitions </li></ul><ul><li>- Specialised Consultancy </li></ul><ul><li>Product & Concept Communication </li></ul><ul><li>- Media & Electronic Mediums </li></ul><ul><li>- Indian News Print </li></ul><ul><li>Final Launch </li></ul><ul><li>-Selection of appropriate & workable franchising setup, eg Master Franchisee / Unit Franchisee etc. </li></ul>
  7. 7. SPECIALITIES OF INDIAN MARKET <ul><li>A continent in itself with almost all the extremities of Nature. </li></ul><ul><li>It has 325 languages and 1652 dialects. Its probably having the largest muslim population in the world though known as a Hindu state – A truly secular country </li></ul><ul><li>The height of secular nature is that despite being a largely hindu dominated state, an Italian catholic lady is the head of the largest political party, our President is a muslim, and our Prime Minister is a sikh. </li></ul><ul><li>Largest democracy of a billion plus – 16% of world population with huge domestic consumer market growing day by day with growing quality awareness.. </li></ul>
  8. 8. SPECIALITIES OF INDIAN MARKET <ul><li>India, today the Youngest Nation, the back office of the world and Indians the most preferred workforce around the globe, with more than 60% of global off shoring.. </li></ul><ul><li>It is having the extremities of nature. While one market is situated at the highest altitude – LEH, whereas another markets are at sea level – Kerala </li></ul><ul><li>An affluent middle class expanding day by day. </li></ul><ul><li>A filthy rich population of approx. 3 – 4 Millions NRI, an excellent source to channelise your investments. </li></ul>
  9. 9. Franchising Opportunities in India
  10. 10. PROMINENT GLOBAL PLAYERS IN INDIAN FRANCHISING SCENARIO <ul><li>McDonalds </li></ul><ul><li>Wall Mart </li></ul><ul><li>Sub way </li></ul><ul><li>Pizza Hut </li></ul><ul><li>Domino’s </li></ul><ul><li>Papa John </li></ul><ul><li>TGI Friday’s </li></ul><ul><li>Medicine Shoppee </li></ul><ul><li>Cookie Man </li></ul><ul><li>Gloria Jean Coffee </li></ul><ul><li>Costa Coffee </li></ul><ul><li>Body Shop </li></ul>
  11. 11. Leading Italian Brands with future in India <ul><li>High Fashion – Valentino, Armani, Versace, Gucci, Trussardi, Bulgari, Moschino, Donna Karan, D&G, Prada, Chanel, Salvatore,Ferragamo </li></ul><ul><li>Spirits – Campari </li></ul><ul><li>Kidswear – Monalisa </li></ul><ul><li>Sports fashion – Kappa </li></ul><ul><li>Men’s Footwear – Fratelli Rossetti </li></ul><ul><li>Men’s wear – Morzotto </li></ul>
  12. 12. Leading Italian Brands with future in India <ul><li>Olive oil brand – Bertolli </li></ul><ul><li>Automobile – Fiat </li></ul><ul><li>Insurance – Generali </li></ul><ul><li>Eye wear – Rayban, Killer Loop </li></ul><ul><li>Confectionery – Perfetti </li></ul>
  13. 13. Core Opportunities & Limits in Indian Market India among top 10 FDI destinations in the developing world & currently the 2 nd most preferred after China.
  14. 14. Core Opportunities & Limits <ul><li>Declared second most attractive destination for retailers among 30 emerging markets. </li></ul><ul><li>Emerging economy - ability to identify the trends and seize the appropriate moment for entry into the market. </li></ul><ul><li>Huge unexplored space in retailing & franchising sectors. </li></ul><ul><li>Early mover advantage. </li></ul><ul><li>Availability of low cost resources. </li></ul><ul><li>Largely religious with strong sentiments. (Beef, Pork) </li></ul>
  15. 15. Advantages for foreign franchisors <ul><li>Prior presence of seasoned franchisors like McDonald, Marks & Spencer, etc </li></ul><ul><li>Multi ethnic Society that has varied demands. </li></ul><ul><li>Flourishing Class of Urban customers with considerable disposable income. </li></ul><ul><li>Growing Brand awareness among consumers. </li></ul><ul><li>Media Exposure continues to fuel consumerist lifestyle. </li></ul><ul><li>Space for almost every possible product & services. </li></ul><ul><li>Opening up of markets in tier 2 & tier 3 cities in addition to shooting demands from existing metro / semi metro markets. </li></ul><ul><li>Franchising still in formative stage in the country, hence opportunity to fiilip the gap yet to reach its peak. </li></ul>
  16. 16. Some current Franchising news: - Papa John to open 500 Pizza outlets in India over next 10 years - McDonalds plans 40-50 restaurants in South India - Cookie Man, an Australian brand plans to open 14 outlets and 40 express counters across the country in a period of one year.     - Restaurant Chain TGI Friday’s has picked up 25.1% stake in its Indian Master Franchisee firm, Bistro Hospitality Pvt Ltd. Currently 5 outlets.     - Gloria Jeans Coffee, one of the largest coffee chain in the world, plans entry in Indian market. Source :
  17. 17. Some current Franchising news:      - Bullish on India, Britain’s Costa Coffee plans to open 290 outlets in next 4 years.      - Crustum products to bring Asian bakery chain Bread Talk to India.      - Largest postal system in the world, Indian Department of Post, to go for franchising.      - Medicine Shoppee , world’s largest chain of retail pharmacy chain has identify India as its fastest growing market and planned to set up 700 outlets.Currently 100 outlets. - The Body Shop, world’s leading high end personal care retailer is entering India. - Reid & Taylor to add 150 outlets. More than 3000 outlets presently. Source :
  18. 18. Thank You