The leading UK retailer, Marks & Spencer (M&S), is planning to set up a 51-49 joint venture in the India. The move is part of a larger global business strategy which is betting heavily on China and India for growth. Three or four Indian partners are said to be ready to partner with the foods-to-apparel retailer, given that single brand retailers in the country are allowed equity only up to 51%.
Buying into the Indian middle class purchasing power story, the high-street retailer is also planning to sell all kinds of food, confectionery, snacks and home furnishing in India, all under the M&S brand.Up to now, the company has sold only clothes and lingerie through its franchisee partner Planet Retail, which operates brands such as Debenhams, The Body Shop, Adidas, Guess and The Athlete`s Foot in India. Its retail operations in India span over nearly 22 cities including Delhi, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad, Gurgaon, Noida, Pune, Nagpur, Kanpur, Lucknow, Chandigarh, Ludhiana, Jaipur, Indore, Ahmedabad, Surat, Mangalore and Guwahati.
Meanwhile the retail industry in India is set for a major turnaround with international names rushing in over the last 12 months. In the past, foreign companies have often used the franchisee-model to introduce brands in India and test consumer preferences. But with the India growth story assuming an almost iconic status, the same brands now want to control the Indian operations themselves.
Many like LVMH, Christian Dior, Diesel, Dolce & Gabbana, Armani, Versace and hundreds of other brands are either converting their existing licensee arrangement into an equity joint venture or getting into fresh joint ventures. Sensing an opportunity, even real estate companies are getting into this business and forging joint ventures with foreign brands.