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February 16, 2026
Christina Moniz, Financial Express (Brand Wagon)
16 February 2026
Starting this month global sportswear maker Nike shifted its e-commerce operations to beauty and fashion marketplace Nykaa to address poor logistics, high delivery times and inventory niggles. With Nykaa in charge, the brand said, customers can expect free shipping on all orders and faster deliveries rang ing from twotofour days depending on the location.
The change comes at a time when Nike is struggling to cope with declining market share and operational and supply-side issues in India. Its physical store count in the country has dropped by half in the past ten years to 100 from over 200 a decade ago. Nike in India undertook major restructuring of its business between 2016 and 2019, closing 35% of its stores in those three years to take a more digital-first approach.
It’s not all doom and gloom though. The brand reported a 14% growth in sales in the fiscal ending March 2025 to clock ₹1,380 crore. But it is well behind competing brands such as Puma (₹3,274 crore) and Adidas (₹3,114 crore), both of which have over 400 stores across the country.
Given India’s size, the competitive landscape and potential, treating it as a secondary export market to be serviced from Singapore was a poor decision on Nike’s part, says Devangshu Dutta, founder and CEO, Third Eyesight.
Nike’s alignment with a local player offers important strategic lessons for global brands with big ambitions in India, especially those in the ₹8,800 crore sportswear market. Brands that have not treated India as an afterthought have succeeded in creating sustained growth and market leadership, says Dutta.
“Most of Nike’s global competitors have treated India as a market high consequence. Nike might be the leader by global revenues, in India is smaller than its global rivals like Adidas, Puma and Skechers. ASICS has a smaller base but is growing at 30% while Lotto is also looking to grow its footprint massively, observes Dutta.
Ever since Nike’s digital-first pivot, its customers in the country have raised several complaints citing delivery failures and poor service, with some deliveries reportedly taking weeks. Its decision to transfer its digital operations to Nykaa in India could potentially address these missteps and reverse the breakdown of customer experience, say experts.
Changing course
“The recent move feels like Nike acknowledging that India cannot be treated as an extension of a global system. It needs local infrastructure, local partners, and a model built specifically for how Indians shop online. Partnering with Nykaa brings local execution muscle that is hard to replicate quickly,” observes Tusharr Kumar, CEO, Only Much Louder, adding that the move is a maturity moment for global brands. “Scale alone doesn’t guarantee success. What matters is adapting to local consumer behaviour, logistical realities and service expectations,” says Kumar.
That said, Nike’s shift won’t be without challenges. The biggest one will be balancing scale with brand control, notes Yasin Hamidani, director, Media Care Brand Solutions. “While Nykaa offers strong reach and trust, Nike will need to ensure its premium positioning, product storytelling, and customer experience don’t get diluted. If managed well, this move doesn’t necessarily hurt Nike’s brand,” he states.
However, he adds that competition like Adidas and Puma, with stronger on-ground retail and omnichannel presence, may gain an edge if Nike’s visibility or momentum slows. “The partnership with Nykaa must feel strategic and not like a retreat,” he cautions.
Given that Nykaa is also a marketplace for other activewear brands, it remains to be seen how the platform maintains Nike’s premium customer experience. “On its own platform, Nike could control everything from storytelling to checkout flows and post-purchase engagement. Nike will now need to adjust to sharing customer data, promotional calendars, and operational priorities with a partner platform,” says Somdutta Singh, founder & CEO at Assiduus Global, adding that striking the right balance between leveraging Nykaa’s scale and maintaining Nike’s distinctiveness will be key.
(Published in Financial Express – Brandwagon)
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January 15, 2026
Sagar Malviya, ET Bureau
Mumbai, 15 January 2026
It’s mostly a tale of two halves for top western fashion labels in India after the runaway sales and retail expansion in the years soon after the pandemic.
While Marks & Spencer, Benetton, and Adidas are battling waning demand, Uniqlo and Nike are gaining fresh ground, reflecting wider choices and increasingly discerning buyers in one of the world’s fastest-growing consumer economies.
Spanish brand Zara is facing stagnant growth while it tapered off at Apparel Group, which sells Aldo, and Charles & Keith brands in India. Experts termed the divergent sales performance as a potential structural shift instead of demand slowdown in India’s fashion and lifestyle market.
Devangshu Dutta, founder of retail consulting firm Third Eyesight, said consumers have clearly shifted towards function, even as trend-led brands continue to exist though they tend to be comparatively smaller. Some brands are also finding it harder to set or even follow trends the way they once did.
“This is especially true for Gen Z, which stays closely tuned to global trends and acts as the primary driver of fashion adoption,” said Dutta. “While older consumers may have greater spending power in absolute terms, it is younger shoppers who shape trends and influence product sales.”
Growth slowed across most leading retailers and fast-fashion brands in the country in FY24 as high inflation and stagnant incomes crimped discretionary spending.
While the trend remained the same for many even in FY25, select brands staged a strong rebound. For instance, Nike India’s sales rose 14% in FY25, up from a 4% increase in the previous year, while Uniqlo accelerated growth to 45%, from 31% in FY24.
Revival after Festive Season
Even Lifestyle, India’s biggest department store chain, grew 5% last fiscal, rebounding from a 4% decline in FY24.
Uniqlo said it continues to see steady momentum in India, supported by strong customer response, retail expansion, rising brand awareness, and a strong ecommerce uplift. “India is now among Uniqlo’s fastest-growing markets in Asia and plays a meaningful role in the region’s overall business,” Kenji Inoue, chief financial officer and chief operating officer, Uniqlo India told ET. “The country’s young demographic, growing focus on quality, and increasing appreciation for functional everyday clothing have all contributed to this progress.”
According to the Retailers Association of India (RAI), sales growth in organised retail segments such as apparel, footwear, beauty and quick service restaurants (QSR) saw single-digit sales growth last fiscal year but the market has recovered after the festive season with double-digit sales performance.
“Demand has improved, but it isn’t broad-based,” said Kumar Rajagopalan, chief executive at RAI which represents organised retailers. “With more fashion options available, Indian consumers are becoming more selective, and growth is coming to brands that offer a strong value proposition and not the cheapest products, but those where prices are justified by innovation, design and quality.”
In FY25, Apparel Group recorded a 25% sales growth, slowing from a 37% increase a year ago. Inditex Trent, which sells Zara in India, saw flat sales compared with an 8% growth in FY24.
Adidas too saw its revenue growth rate slowing to 5% from 20% in the previous fiscal. Sales of M&S and Benetton fell 12% and 3% each, respectively.
Being the world’s most populous nation, India is an attractive market for apparel brands, especially with youngsters increasingly embracing western-style clothing. However, most international and premium brands have been competing for a relatively narrow slice of the sales pie in large urban centres.
(Published in Economic Times)
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June 13, 2025
Hiral Goyal, The Morning Context
13 June 2025
Several smart, well-to-do Indians believe they have an opportunity to build a successful business by selling apparel to affluent people. Armed with this hypothesis and with venture capital in tow, these entrepreneurs are having a go at the market.
Some are building a business just around undergarments, for instance. Others are focusing on premium T-shirts. Or denim wear. There’s also ethnic wear. And work clothes. Even workout clothes. It would appear that every niche in the apparel market is being exploited by someone who believes they have a product that can disrupt the category and create a large, sustainable business.
Amid this sea of ventures, BlissClub stands out.
In only five years of operations, the Bengaluru-based startup has made a name for itself. By simply focusing on premium activewear for women. Now that’s a niche within a niche.
Founded by Minu Margeret in 2020, BlissClub’s story goes something like this. Drawing on her personal experience as a frisbee player, Margeret started BlissClub to address the needs of Indian women who struggled to find comfortable and functional activewear. With inclusive sizing and tiny details such as pockets and wide waistbands in leggings, the startup catered to Indian women with products that were specifically designed for them and their body types.
The idea clicked. Women were willing to experiment with BlissClub’s clothing and, on the back of its early success, the company has grown from zero to revenue of over Rs 85 crore as of 31 March 2024. The startup has also been able to raise capital from VC investors like Elevation Capital, Eight Roads Ventures and Alteria Capital, who’ve come on board hoping that Margeret is onto something. Just last month, the company raised Rs 45 crore (around $5.3 million) in a Series B funding round, a mix of debt and equity. This took its total fundraise to nearly $26 million (Rs 222 crore), according to Entrackr.
Except that’s all the good news there is. Five years in, it looks like BlissClub is at a crossroads. Its revenue growth has slowed-from 360% year-on-year in 2022-23 to just 27% in 2023-24-and its valuation remains flat at $67 million.
Already, women’s activewear as a category is far too niche. It doesn’t help that BlissClub now faces intense competition from legacy players like Page Industries (Jockey’s India licensee), Aditya Birla Group and French sporting goods retailer Decathlon as well as startups like HRX and Clovia. All of them are trying to grow their sales to keep up with the rapidly growing trend of casual attire, where product differentiation is now largely down to marketing. It is another matter altogether that these customers are price-conscious, and disposable income to spend on premium clothing is limited to a few million people in India.
That’s the reality of the market where BlissClub operates. “The greatest challenge for the new athleisure brands, apart from capital and internal execution discipline, is to maintain brand integrity rather than get sucked into price battles and discounting, which is a race to the bottom that only the businesses with large balance sheets can win,” says Devangshu Dutta, founder and chief executive of Third Eyesight, a management consulting firm focused on the retail and consumer goods industry.
Questions sent to Margeret did not elicit a response. But it’s important to ask, what should BlissClub do? It may have had a great start, but is that enough to scale? This is what we’ve set out to explore in this story.
Fighting the big guns
Almost every customer in India who’s out to buy activewear or athleisure-has enough well-known brands to choose from. There’s Jockey, Decathlon, Nike, Puma, Adidas, Asics and Skechers, to name a few. And there’s something for everyone at every possible price point.
So, what particular need is BlissClub trying to fulfill?
Margeret says she started the company because she could never find appropriate activewear in the Indian market. From BlissClub’s website about its origin story: “While some clothes were comfortable, they simply did not stretch enough. Those that did stretch, were too compressive.” With BlissClub, Margeret focused on inclusive sizes and comfortable fabric that was ideally suited to India’s hot climate.
But are inclusivity and quality enough when it comes to having a differentiating factor? Not really.
Nothing, for instance, would stop other brands from copying BlissClub’s designs or offering comparable quality to gain customers. Additionally, BlissClub risks losing customers to other brands if it fails to keep up with its promise of top-most quality products. Some customers have already taken to social media recently to share their grievances (here, here, here and here). Their most common complaint? The quality of BlissClub’s fabric has gone down and there’s a lot of pilling.
On top of this, there is unrelenting competition from legacy players, most of whom have been building their athleisure portfolio for sometime now. Take Page Industries, for example. The company launched its athleisure portfolio in 1995, but it only doubled down on making it a key growth pillar in 2014-15. Just a couple of years later, Aditya Birla Group entered the men’s athleisure business with Van Heusen in 2016 and later expanded into women’s wear as well. Both these brands were quick to identify the shifting fashion trend to casual wear and benefited handsomely when the category finally exploded during the COVID-19 pandemic-as people started working from home and focusing on their physical health. Here’s what Page Industries’ CEO Karthik Yathindra told Mint in 2022 about the company’s decision to focus on athleisure: “So, the timing worked out for us very well. Demand has also been healthy across innerwear for men and women, but athleisure really surged a lot more than what we had anticipated or planned for. I would say, we jumped a year or two in terms of demand with athleisure compared to pre-pandemic days. We literally doubled our business. Whereas, overall, as an organization, we clocked 37-38% jump in revenue in the last financial year.”
It is no surprise then that these companies are well positioned in terms of the distribution network and the range of choices they offer to take on the Indian athleisure market as compared to BlissClub and other small players. Page Industries, for example, has more than 111,000 multi-brand stores and 1,453 exclusive brand stores, besides its digital presence through its own website and third-party marketplaces. BlissClub, on the other hand, has largely been an online player, selling products through its own website or through marketplaces like Myntra and Amazon. At present, it runs 14 retail stores across nine cities.
That’s no small gap, and competition is only going to heat up. So, what options does BlissClub have?
Stretched thin
From where BlissClub stands today, there are only a few ways it can grow its top line. Mostly because the size of India’s athleisure market remains small; it’s even smaller for women. “Athleisure is a $15 billion market with a CAGR of 20%. Of this, women are -30-40%,” says Gaurav Verma, co-founder and head of consumer investments at venture capital fund Ortella Global Capital. This $5-billion market for women’s activewear becomes smaller if we take into account only the premium space. (We couldn’t independently verify this estimate as there are no reliable reports available.)
In a niche market like this, there’s limited room to scale. Unless you cut down prices, introduce more categories, start catering to all genders or open retail stores. Let’s look at each of these options.
First up, the prices. Any premium brand that cuts prices risks diluting itself. Now, BlissClub has been handing out discounts and buy-one-get-one offers more liberally than ever before. For example, its Ultimate Leggings the company’s bestselling product -is priced at Rs 2,299 and sold at Rs 1,399 after discount. But when you compare it with Decathlon or homegrown brands like Hrithik Roshan-backed HRX or Clovia, you’d find that BlissClub remains in the premium segment even after discounts. And while lowering prices further might help BlissClub gain more customers, its margins-already EBITDA-negative-will most likely suffer.
The second strategy is introducing more categories. This is something BlissClub seems to be interested in. The startup entered the innerwear category with sports bras. The latest additions have been swimwear and travel wear. But in these segments, BlissClub is yet to replicate the kind of success it saw with its flagship products-Ultimate Leggings and Ultimate Flare Pants.
There is a bigger problem here. When it comes to athleisure startups, says Verma, “there are growth concerns beyond the top 3-5 SKUs [stock keeping units) like leggings, tops.” He goes on to say, “Unless we see growth in [direct-to-consumer) on higher-priced SKUs like jackets, shoes and accessories, we will continue to see pressure on both top line and bottom line growth.”
To make matters worse for BlissClub, the new categories the company is venturing into are witnessing increased competition. Take innerwear, for example. Influencer Kusha Kapila recently announced her shapewear brand Underneat, backed by Fireside Ventures and Mamaearth co-founder Ghazal Alagh. Besides this, players like Jockey, Clovia and Van Heusen have also been fighting for market share.
The third option, then, is to enter the menswear category. Though a natural extension for any athleisure brand, it does not promise scale. Let’s look at Technosport for some perspective. The A91 Partners-backed company, which sells affordable activewear for men and women across categories, reported a revenue of Rs 382 crore (around $44.5 million) in 2023-24. But that is after 18 years of operations and catering to the mass market with a fairly well-established distribution in the offline channel.
An even bigger challenge for BlissClub here would be to shake off its identity as a brand for women. Take the case of Lululemon. When the Canadian activewear company entered the men’s business in 2014, the biggest concern was that the brand was popularized by women and it would be tough to convince male customers to buy its products. The breakthrough here was the company’s ABC pants-short for anti-ball crushing pants-which helped Lululemon acquire male customers. Still, Lululemon continues to struggle with its identity as a women’s brand. Its latest effort to fight this was by making seven-time Formula 1 champion Lewis Hamilton its brand ambassador.
Finally, there’s the option of opening physical stores to acquire more customers. A digital-first strategy, says Dutta, allows the newer niche brands to directly connect with their target customers and achieve a critical mass. However, to get greater scale, “they need to add offline presence as well,” he notes. “Offline stores are not just a mainstreaming opportunity but also a way to create a brand immersion experience for the consumers, which can strengthen the connect with their core consumer segment.”
However, considering that BlissClub is a premium brand, it only makes sense for the brand to open outlets in high-street markets. But this would entail some serious expenditure. After all, opening retail stores requires capital.
Raising capital, though, does not look like a tall order for BlissClub. Its most recent fundraise, which will be used towards growth and expansion, is a testament to that. Before that, the company had raised $15 million in its Series A round. The credit for this partly goes to Margeret and Vidit Aatrey’s connections in the VC ecosystem. Aatrey, Margeret’s husband, is Meesho’s co-founder and CEO (the e-commerce company itself has raised $1.61 billion in total funding.)
Thanks to the funds it has been able to raise, BlissClub has had a good run so far.
However, with competition brewing in this space, the company risks losing its edge and becoming one of many. To give credit where it’s due, BlissClub has done a great job at building brand equity in the Indian activewear market. To grow beyond where it is today, though, it will need to rethink its strategy.
Perhaps it already is. In the last year, BlissClub has entered into categories beyond activewear; this includes innerwear, swimwear and most recently, travel wear. At the same time, it is also opening retail stores across the country.
How BlissClub scales will leave cues not just for Margeret but everyone else who believes they can build a niche apparel company in India successfully.
(Published in The Morning Context)
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December 4, 2024
Sagar Malviya, Economic Times
4 December 2024
Demand for sportswear from running shoes to joggers and yoga mats slowed down for leading firms such as Puma, Adidas, Nike, Skechers and Asics, halting their sprint since the easing of the Covid-19 pandemic when they doubled their sales in two years.
Sportswear firms have reported 1-25% year-on-year increase for 2023-24, down from 35-85% increase for the previous financial year, according to the latest regulatory filings. While demand for fitness wear and sports equipment for disciplines other than cricket grew as people prioritised health with the onset of Covid-19, consumers cut back on discretionary spends across categories over the past six to eight quarters.
Experts said companies capitalised on the popularity of more casual styles in the wake of the pandemic, a trend that has subsided now although people are more health conscious than ever. A broader slowdown, especially in cities, hurt premium categories including sportswear, which are completely dominated by global players.
“Sportswear or footwear has a slower replacement cycle than apparel and lifestyle products. Also, there is a distinct slowdown as it all comes down to income growth versus inflation. So, a longer term potential still remains for the segment but there is a short-term consumption stress,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.
With a population of 1.4 billion, India is among the fastest growing and largest international markets for footwear companies and over the years companies such as Under Armour, Asics and Skechers have expanded aggressively in the country.
Puma India managing director Karthik Balagopalan said the category has outpaced market growth with mid to high single digit growth rates even as subdued demand has lagged expectations.
“When it comes to health and fitness, consumers continue to spend on performance products and our sports-first strategy also leans towards that. Our ambition continues to grow at or be above market CAGR (compound annual growth rate) over the mid-term, and we think we are in a good place with our back-end infrastructure, our product portfolio and pipeline, BIS (Bureau of Indian Standards) readiness and our best-in-class team, who will continue to cement and retain our lead on competition,” he said.
In October, Foot Locker entered India through a long-term licensing agreement with Metro Brands, which will own and operate stores, while Nykaa Fashion will be its exclusive e-commerce partner.
However, there are challenges. In August this year, the government made it mandatory for footwear companies to obtain BIS certification for more than a dozen footwear products including sports brands. This impacted sales even last year as BIS had not issued licences to several foreign brands whose products were manufactured outside India, which in turn, forced brands to cut down on supplies.
American footwear firm Skechers said in its last earnings call that it had been growing exceptionally well in India for several years but there was a bit of an anomaly in part because of some of the regulatory changes that it had not yet fully responded to.
“We continue to work closely with both our India team and regulators to further advance our local sourcing strategy. We are seeing positive trends and remain optimistic about the progress in this important market. We see tremendous opportunity, not only in our lifestyle business, but also in performance,” Skechers chief operating officer David Weinberg told analysts.
(Published in Economic Times)
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January 7, 2010
By Tarang Gautam Saxena, Chandni Jain and Neha Singhal
In Retrospect
While India was a promising market to many international brands, it was not completely immune from the global economic flu. More than its primary impact on the economy, the global downturn sobered the mood in the consumer market. Even the core target group for international brands, that had just begun to splurge apparently without guilt, tightened their purse strings and either down-traded or postponed their purchases.
In 2008 in the midst of economic downturn, skepticism and uncertainty, the international fashion brands had continued to enter India at nearly the same momentum as the previous year. Many international brands such as Cartier, Giorgio Armani, Kenzo and Prada entered India in 2008 targeting the luxury or premium segment. However, given the high import duties and high real estate costs, the products ended up being priced significantly higher than in other markets. Many players ended up discounting the goods heavily to promote sales while a few also gave up and closed shop.
As the Third Eyesight team had foreseen last year, 2009 saw a further slowdown and fewer international brands being launched during the year. The brands that were launched in 2009 included Beverly Hills Polo Club, Fruit of the Loom, Izod, Polo U.S., Mustang, Tie Rack and Timberland. Some of these had already been in the pipeline for quite some time and invested a considerable time and effort in understanding the dynamics of the Indian retail market, scouting for appropriate partners, building distribution relationships and tying up for retail space, setting up the supply chain and, most importantly, getting their operational team in place.
International Fashion Brands in India
After many deliberations, the well-known global brand Donna Karan New York set foot in the Indian market in 2009 through an agreement with DLF Brands to set up exclusive DKNY and DKNY Jeans stores India. The brand is also reported to have signed a worldwide licensing agreement with S Kumars Nationwide Ltd to design, manufacture and retail DKNY menswear in certain specific countries.
Second Chances
Amongst the international brands that have recently entered the Indian market, a few are on their second or even third attempt at the market.
For instance, Diesel BV initially signed a joint venture agreement in 2007 with Arvind Mills, and the partnership intended opening 15 stores by 2010. However, by the middle of 2008, the relationship ended with mutual consent, as Arvind reduced its emphasis on retailing international brands within the country. Within a few months of the ending of this relationship, Diesel signed a joint venture with Reliance Brands for a launch scheduled for 2010. Both partners seem to be strategically aligned with a common goal as the international iconic denim brand wants to take on the Indian market full throttle and the Indian counterpart has indicated that it wants to rapidly build its portfolio of Indian and foreign brands in the premium to luxury segments across apparel, footwear and lifestyle segments.
Similarly, Miss Sixty entered India in 2007 through a franchisee agreement with Indus Clothing. It switched to a joint venture with Reliance Brands in the same year but the partnership was called off in 2008, despite plans to open more than 50 stores in the first three years of operations. Miss Sixty has finally entered India through a franchise agreement with a manufacturer of women’s footwear and accessories. The company has currently introduced only shoes and accessories category and is looking at potential partners for its label Energie and girls’ range Killah.
Other brands that have re-entered the Indian market include Germany-based Lerros whose first presence in India was back in mid-1990s. The brand re-entered the market in 2008 through own brand stores and is growing its presence through this route as well as through multi-brand stores.
Oshkosh B’gosh is another brand that had entered India in mid 1990s, through a licensing agreement with Delhi based buying house, Elanco. The licensee found the childrenswear market hard to crack, and closed down. In 2008, Oshkosh re-entered the Indian market through a licensing partnership with Planet Retail and is now available through shop-in-shop counters at Debenhams stores. Reports suggest that it may consider setting up exclusive brand outlets.
During the turbulence of 2008 and 2009, a few brands also exited the market. Some of them were possibly due to misplaced expectations initially about the size of the market or about the pace of change in consumer buying habits. Others were due to a failure either on the part of the brand or its Indian partners (or both) to fully understand what needed to be done to be successful in the Indian market. Whatever the reason, the principals or their partners in the country decided that the business was under-performing against expectations and for the amount of effort and money being invested, and that it was better to pull the plug.
Some brands that have been pulled out of the Indian market during 2008 and 2009 include Dockers, Gas, Springfield and VNC (Vincci). Gas (Grotto SpA) is reported to remain interested in the market but has not found another partner after its deal with Raymond fell through in 2007 and all dozen of its standalone stores were shut down.
The Scottish brand Pringle and its Indian licensee did not renew their agreement upon its expiry. The Indian partner has reportedly signed an agreement to launch another international brand in India, while Pringle is said to be looking for new licensee.
The good news is that successful relationships outnumber every exit or break in relationship possibly by a factor of ten. Some of the brands that have sustained are among the early entrants having a presence in India since the late-1980s and 1990s or even earlier. These include Bata, Benetton, adidas, Reebok (now also owned by adidas), Levi Strauss and Pepe. Having grown very aggressively during 2006 and 2007 Reebok quickly became the largest apparel and footwear brand in India, while Benetton and Levi’s are expected to cross the $100-million mark for sales this year.
Entry Strategy & Recent Shifts
As envisaged in Third Eyesight’s report from a year ago, with changing market conditions and a growing confidence in the Indian market, there has been a shift among international brands in the choice of the launch vehicle. While franchising has been the preferred mode of market entry in the recent past for risk-averse brands, more brands today demonstrate a long-term commitment to the Indian market, and are choosing to exercise ownership through wholly or partially owned subsidiaries and through joint ventures.
In 2009, we have seen a noticeable shift in favour of joint-ventures as the choice for entry into the market. Even the brands already present are looking to modify the nature of their existing presence in India in order to exert more control over the retail operations, products, supply chain and marketing.
Current Operating Structure
(End 2009)
Brands that changed their operating structures and, in some cases partners, in recent years include VF (Wrangler, Lee etc.), Lee Cooper, Lee, and Louis Vuitton amongst others.
Mothercare, the baby product retailer, which is present through a franchise agreement with Shopper’s Stop has, in addition, recently formed a joint venture with DLF Brands Ltd to enable the expansion through stand-alone stores. Gucci, which had initially entered in 2006 with the Murjani Group as a franchisee, has recently changed over to Luxury Goods Retail, and is now in the process of restructuring the relationship into a joint venture.
VF has also been reported to be looking to license Nautica, Jansport and Kipling to a new partner. Until now, these brands were handled through the joint venture with Arvind Brands. Arvind has increasingly focused on its core business, closed stores and scaled down expansion plans for the international brands.
Burberry that had entered India in 2006 through a franchisee arrangement with Media Star opened two stores under this arrangement. It has now set up a new joint venture with Genesis Colors and plans to open 20 stores across the country.
More recently Esprit has also been reported to have approached Aditya Birla Nuvo to deepen its engagement by moving from its distribution arrangement into joint venture as the international brand sees excellent potential in the Indian market.
Buckling up for 2010
Throughout 2009, the one fact that became clear was that the Indian market was resilient. Now, as the global economic condition stabilizes, confidence levels of brands and retailers in India have also improved.
Several launches are already expected in 2010, and possibly many more are being worked upon. In the following 12 months, consumers can expect to find within India acclaimed brands such as Diesel, Topman, Topshop and the much-anticipated Zara. Many more Italian, British and French brands are examining the market.
Most of the international fashion brands already present in the market are also projecting a cautiously upbeat outlook in their plans, while a few are looking positively bullish.
For example, Pepe, an old player in premium and casual wear segment, has reported plans to grow its retail network further and open 50 more franchise stores by September 2010. Similarly the German fashion brand S. Oliver that entered the Indian market in 2007 is looking to grow significantly. It has already moved from a franchise arrangement with Orientcraft to a joint-venture with the same partner, and has stepped up its above-the-line marketing presence. The brand has recently reported its plans to scale up its retail presence to 77 stores by the end of 2012 while also strengthening its presence through shop-in-shop in multi-branded outlets in high potential markets.
Those international brands that have tasted success have not achieved it by blindly importing business models and formulas from other markets. Most have had to devise a different positioning from their home markets. Some have significantly corrected pricing and fine-tuned the product offering since they first launched. These include The Body Shop which decreased its prices by up to 30% this year, and Marks & Spencer which reduced prices by 20-40%. Others are unearthing new segments to grow into; for instance, Puma and Lacoste are now seriously targeting womenswear as a growth market.
On the operational side, the good news for retailers and brands is that the average real estate costs have reduced significantly, although marquee locations remain high. In several locations lease models have also moved from only fixed rent to some form of revenue sharing arrangement with the landlord. And, while the sector has seen some employee turmoil as many non-retail executives who came into the business in the last 5-7 years have returned to other sectors, employee salary expectations are also more realistic.
As customer footfall and conversions pick up, international brands are also shoring up their foundations for future expansion in terms of better processes and systems, closer understanding of the market, and nurturing talent within their team. Third Eyesight’s recent work with international brands’ business units in India highlights the international players’ concern with ensuring a consistent brand message, improved organizational capabilities right down to front-line staff, and focus on unit productivity (per store and per employee).
We may yet see a few more exits, and possibly some more relationships being reshuffled and partners being changed. However, all things considered, we can look forward to a net increase in the number of international brands in the country.
The Indian consumer is certainly demonstrating more optimism and as far as there are no major unforeseen global or domestic shocks, this optimism should translate into a healthier business outlook for international brands as well. According to early signs, 2010 could be an excellent curtain-raiser for a new decade of growth for international fashion brands in India.
[The 2009 report is available here: “International Fashion Brands – India Entry Strategies”]
(c) 2010, Third Eyesight
[Note: This report is based on information collected from a combination of public as well as proprietary sources, and in some cases may differ from press reports. However, no confidential information has been shared in this report.]
