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India’s retail landscape is poised for a significant surge with approximately 20 foreign brands anticipated to make their debut in the country within the next 6-8 months. This substantial increase in brand entries doubles the pre-pandemic annual average of around 10 foreign brands.
The appeal of India’s retail market, coupled with growing affluence and evolving consumer preferences, has captured the interest of international brands.
Key players such as Reliance and Aditya Birla are eagerly embracing collaborations with foreign brands. Among them, Reliance Brands, a part of Reliance Retail, stands out as particularly assertive.
“Unlike global markets grappling with slowdown and recessionary concerns, retail sentiment in India remains upbeat. This positivity is expected to translate into increased spending across non-essential categories, especially as the festive season approaches,” highlighted Abhinav Joshi, Head of Research for India, Middle East & North Africa at consultancy CBRE.
Leasing Activity on the Rise
CBRE recently released a report indicating a robust 24% year-on-year growth in retail leasing activity during the first half of CY2023, spearheaded by both foreign and domestic brands.
The second half of the year is projected to maintain a strong double-digit growth rate, aiming to push overall retail leasing to 5.5-6 million sq. ft. by the end of CY2023. This is second only to the peak of 6.8 million sq. ft. witnessed in CY2019.
An Influx of Names and Collaboration
A roster of renowned names eyes an Indian entry in the coming quarters.
This list includes Italian luxury fashion brand Roberto Cavalli, American sportswear and footwear brand Foot Locker, Armani Caffe, the luxury cafe brand of Armani, and British luxury brand Dunhill, among others.
Industry sources reveal the eagerness of labels like Spanish luxury brand Balenciaga, Chinese brand Shein, and more to join India’s vibrant retail landscape.
Galleries Lafayette, which partners with Aditya Birla Fashion and Retail, is a standout case, whereas many others are either negotiating with or partnering with Reliance Brands.
As a first phase, these brands are targeting key cities such as Mumbai, Delhi-NCR, Bengaluru, and Hyderabad. Their strategic expansion roadmap extends to other cities including Pune, Ahmedabad, Chennai, and Kolkata.
The Bright Retail Prospect
Devangshu Dutta, CEO of Gurugram-based consultancy Third Eyesight, asserts that the Indian retail opportunity is compelling, driving foreign retailers to capitalize on it.
Notably, brands that have previously entered the market have experienced success, particularly in the fast fashion category, indicating growing brand awareness and consumer willingness to invest in global products as disposable incomes rise.
Japanese fast fashion retailer Uniqlo, for instance, announced its intention to launch two new stores in Mumbai in October, solidifying its commitment to the Indian market.
Metropolitan Leasing Growth
CBRE’s report highlights the upward trend in retail leasing. Mumbai witnessed a 14.6% year-on-year growth in the first half of CY2023, spurred by foreign brands’ interest in securing space.
Meanwhile, Delhi-NCR reported a notable 65% year-on-year growth in retail leasing activity during the same period, driven by both foreign and domestic brands.
