Regional equals global brands in the eastern market

The Eastern region of India appears a fertile land for swanky global brands of the world, yet the home-grown brands have their share of growth opportunity in the region too.
Regional equals global brands in the eastern market

Often neglected due to infrastructural bottlenecks, the Eastern region of India appears a fertile land for swanky global brands of the world, yet the home-grown brands have their share of growth opportunity in the region too. A closer look!

Keeping pace with other states, the states of Eastern India that includes West Bengal, Bihar, Jharkhand and Assam, boast of a rising consumerism culture that is driving people in these regions to indulge.

Be it a restaurant chain or apparel brand, retailers are emerging on the wave of rising disposable incomes and the clout of well travelled and well read consumers who are driving the consumption pattern of this region.

Riding on these contributing factors, Kolkata-the city that used to be the capital of the country and popularly called ‘city of joy’-appears to be the hub of retail growth story of Eastern India followed by North-Eastern cities including Guwahati, Shillong, Imphal, and Silchar, are home to global brands, and also Patna and Raipur as well.

Upmarket Brands Look Promising in North-East cities

A recent report says, from the makers of sports and fashionwear to branded jewellery chains, retailers are heading to the North-East either to open their first stores or to expand their presence.

The North-East, home to a combined 55 million people as of 2014, comprises the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Sikkim and Tripura, and thus, setting up one or two stores in the region makes good business sense for brands.

Also, retailers are seeking to tap the demand in relatively unsaturated markets, eyeing new sources of revenue, after establishing themselves in the big cities. North-East is a brand-conscious and fashionforward market.

So it’s a natural progression for fashion brands to be there. Growing incomes and rising purchasing power in urban areas of the North-East are pulling consumers towards premium and branded products. That’s not all. The north-eastern consumer is willing to trade up as well.

For example, Louis Philippe, the men’s brand from Madura Garments that sells apparel, shoes and accessories, started testmarketing its range in the North-East three years ago, with a store in Guwahati. Pleased with the results, it is looking at expanding.

“We will look at more stores in Guwahati as well as at places that are further away,” said Bangalorebased Jacob John, CEO at Louis Philippe at Madura Garments, which has brands including Van Heusen and Peter England in its portfolio.

However, due to its infrastructure bottlenecks leading to transportation challenges and the majority population having more trust in a salaried job and inclination to higher studies etc are giving less number of domestic home brands to flourish.

All the regional retailers present in these cities are completely relying on the Kolkata-based retailers to import apparels, bags, accessories, and thus, the region has yet not seen any successful regional retailer.

Retailing in the city of joy - Kolkata

Retailing in the city of joy is a mixture of traditional homegrown brands like Dhakeswari Bastralaya, Bhajahori Manna, Pariwar Fashions, Sreeleeathers Footwear and the likes of Gucci and Vero Moda.

A recent report by Sulekha says, most of the regional retailers of Kolkata have opted for large format standalone stores in established main street locations like Gariahat and Shakespeare Sarani, while international retailers are largely restricted to pre-committing in under construction malls due to unavailability of vacant space in the operational malls.

Established main streets like Park Street and Camac Street continued to witness significant rental appreciation during the quarter.

This is primarily due to the limited availability of space options coupled with increased demand from food and beverage retailers. However, the rentals Issue Focus Big Retailers of East India on main streets in the suburban and peripheral locations remained stable, the report said.

Commenting on the retailing strategy in that region, Suvankar Sen, Executive Director, Senco Gold and Diamonds Ltd, said, “So far, we have all our stores in high streets as malls generally attract impulsive buyers and jewellery is a serious purchase business, hence, malls are not a viable option for us. As we mostly have our stores in Eastern region, around 50 stores in Eastern India, hence, we can say there is a large scope to grow in this region and the region has not grown to its potential.”

Sharing insights in the retailing scenario of Kolkata, Satyabrata Dey, MD, Sreeleathers Limited, shared, “The retail industry in Kolkata is growing smoothly and both the global and domestic players are growing equally as the market is so huge that it accommodates both segments very well. No competition is there as the people have good disposable income to spend on both the segments.”

Although the authentic market size of Eastern India is not available yet, Rishabh Goenka, Director, Baazar Retail Limited, that runs the apparel brand, Baazar Kolkata, informed that the retail industry has been growing at 15-20 per cent each year in the region and the region’s dense population is fuelling the growth mostly.

As per Cushman & Wakefield data, Kolkata witnessed a healthy demand mix for retail spaces from both domestic and international brands in the second quarter of 2014.

The leasing activity, however, was majorly driven by domestic brands from jewellery and apparel segments followed by international F&B brands. The last quarter also continued to witness queries from F&B and premium lifestyle international brands for quality mall spaces.

Expanding regions

Regional retailers like Sreeleathers or Senco Gold have one thing in common, both of these brands have expanded their presence well beyond the region, and hence, these retailers have tasted success in other regions, too.

Sen informed, “We are planning to expand pan-India. Expanding pan-India as a decision for a regional retailer should come when you have unique products and you see your products will meet unmet demands in a certain region. For our products, there are a huge number of Bengali communities scattered across the country, who are not getting our unique craftsmanship products.”

Striking a similar note, Prashant Gupta, Director, Polo Foods, said, “We started in August 2014 and currently have two operational stores, with six stores in the pipeline. A milestone we have achieved is our ability to execute stores efficiently as per Forever Yogurt’s brand standards. And, I think this execution capability will be a key differentiator amongst QSR brands as the market becomes conducive to scaling up.” Goenka informed, “Baazar Kolkata plans to add eight showrooms, mostly in UP and Bihar. At present, the brand has 35 outlets in seven cities.”

Meeting with changing consumer demands

As informed by Goenka, consumers in Eastern region and Kolkata are inclining towards Indo-western and western dresses, as a result, there has been a decline in the sale of sarees. In contrast, the purchase of Indowestern outfits has seen over 50 per cent growth in the last couple of years.

As per Sen, “Consumers these days are more design conscious, and therefore, we are here to offer the best design craftsmanship. In today’s consumer market, aside from gold and diamond, other modern jewellery is also gaining prominence. Although there is a lot of modern jewellery available, yet gold is still a dominant category in our jewellery business in Eastern region.

As per Gupta, the brand introduces at least a new flavour/product every month to better serve the needs of customers.

Their Caramel Cupcake Frozen Yogurt has been an instant hit. He said, “In fact, it was introduced as a limited time offer, but we have decided to extend the tenure of the product, keeping the customer demand in mind. We also see a marked trend in people replacing meals with healthy food options.”

How crucial is eCommerce?

Retailing in Kolkata has started to change off late. For eCommerce sites like, Kolkata market is growing faster than other metros.

Although Kolkata contributes to 10 per cent sales of super-premium retail brands of, in comparison to 30 per cent in Delhi, growth in sales are encouraging for the eCommerce site, as per Praveen Sinha, Co-founder of

For regional retailers of Kolkata, online retailing is a part of their business growth, and hence, as informed by the retailers, they have their online portal that works as a ‘show catalogue’ where consumers can see and compare different products. However, the conversion rate is very small online and not even five per cent of total revenue for these brands.

There are few retailers for whom eCommerce is not a sustainable business yet. As Dey of Sreeleathers warned, “Online retailing is going to die within the next 5-10 years because there is a difference between the perceived product online and the actual product the consumers get in real.”

Parting thoughts

Clearly, it is not the locations or the brands that are making both the regional brands and global brands to earn well in this region, it’s the consumption pattern coupled with the diverse and dense population of the region that has given impetus to the domestic as well as home-grown brands to prosper.

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