Why international franchisors are desperate to gain foothold in the Indian market

Sunday, June 28, 2009

Why international franchisors are desperate to gain foothold in the Indian market

It’s astonishing to witness a massive surge of international franchisors trying to enter the Indian market.

If you look through the past 15 years, you would see there had been many international brands operating in India through franchising.

Indian market seems to have enough in them to attract International brands.

The retail segment had boomed over the past decade, and franchising has emerged the best possible way to enter a new market as it relieves both the franchisor and the franchisee from the added pressure.

Why do international franchisors are too keen to set their foot in the Indian market?

There are hundreds that have already stepped in, and still, there is more scope for others to sneak in.

A certain change has taken place in the Indian middle class sector. Indian government’s decision to globalize Indian market in the 80’s triggered a change in the attitude of the people.

More and more people became aware of the non Indian goods which began flooding the Indian market in the 80’s.

Though, in the beginning not many took interest in the non Indian manufactured goods, but slowly things began to change and people got acquainted with the new change that had set in.

The franchisors saw it as a good opportunity to make the most and Baskin Robbins was the first to launch its franchise operations in India way back in 1994.

The single most significant reason why international franchisors became successful in India was the unconditional acceptance of foreign goods by the Indian shoppers.

Indians had been quite receptive to the new goods and services; they openly greet anything which is new. They will try and test the new product without hesitation. That was the reason International franchisors were encouraged to invest more in India.

One other reason that played a role was the acceptance of a franchise model by the Indian franchisees.

Indian business houses readily accepted the idea and collaborated to launch retail franchisee set up across the country.

There are plenty of international franchisors here in India with the likes of Reebok, Barista, MC Donald’s restaurant chain, subway and the list goes on.

The growing middle class in India has provided a basis for new business ideas. The country with a massive population and the growing educated young population had all combined to provide a boost to the franchising.

The growth of international franchising in India is just not limited to population alone.

There are little more than a million students who study abroad in various countries, the awareness of foreign brands had also played a part in promoting franchise model in India.

Most of the owners of the franchise model are one time students who studied abroad.

The troubled world economy had not affected the Indian economic scene to a greater extent and interestingly, it should be no surprise if more and more international franchisors set up business in the growing Indian market.

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