Retail Franchise Business is one of the most critical sectors that play a significant role in the Indian economy, and it contributes to about 13% of the country’s GDP.
The sector has witnessed substantial growth with many new players coming into the market, creating competition among them. visit here
However, despite the stiff competition, the industry still maintains its position as the leader in terms of sales. So, keep reading the article about Retail Franchise Business.
Table of Contents
Retail Franchise Business
We take you through some of the best retail franchises in India:
- Grofers – A food ordering app-based company founded by IIT-Delhi alumni Sachin Bhatia and Abhijit Bhargava.
It offers an online grocery platform where customers can order groceries from thousands of local stores. In 2015, it had raised $100 million in funding from investors such as Tiger Global Management and Accel Partners.
- BigBasket – Founded by Deepinder Goyal in 2011, this eCommerce marketplace provides home shopping services across more than 500 cities in India. The company operates on a marketplace model wherein sellers list their products lower than other brick-and-mortar shops. It charges retailers a 2% commission per product sold.
- Foodpanda- Foodpanda is a restaurant discovery mobile application that allows diners to discover restaurants around them and make reservations instantly. As of August 2017, it claims to have served more than 10 million orders since inception.
- FabFurnish – This furnishing store chain offers high-end furniture products sourced from all over the world. It also sells mattresses and beddings. The company founded in 2004 by Sajjan Jindal and his wife, Kiran Mazumdar-Shaw. The couple runs the company together.
- Homehop is yet another online retailer that supplies home appliances, electronics, kitchenware, and furnishings. It established in 2010 by Ashutosh Sharma, who previously worked with Dell Computer Corporation. By June 2016, it claimed to be India’s largest home appliance brand.
- UrbanClap– Founded in 2012, this online service connects businesses with construction companies to offer quality home renovation services. It provides an integrated software solution that includes project management, cost estimation, and payments. The company has completed over 30,000 projects so far.
- Zivame – This is an online health care portal that serves patients seeking medical advice. Founded in 2014, it aims to reduce the growing patient load in hospitals by connecting people with doctors. Currently, the company works only with registered medical practitioners.
Various factors are responsible for the exponential rise in demand for these retail franchises. These include increasing disposable incomes, changing lifestyles, rising urbanization, and changes in consumer preferences. According to experts, the current economic scenario will continue to support the sector’s growth.
There are three main types of retail franchises—business-to-consumer (B2C), business-to-business (B2B) and business-to-government (B2G).
B2C retail outlets sell goods directly to consumers, while B2B retail outlets sell their products to other businesses or organizations. Similarly, B2G retail outlets sell their products or services primarily to government agencies or state governments.
The Indian economy grew at 7.7 percent during 2018–19, its slowest pace in six years. Growth slowed to 5.8 percent during April–June 2019. The Reserve Bank of India (RBI) expects the economy to grow between 6 and 7 percent during 2019–20.
This slowdown is due mainly to weak consumer demand; however, investment activity remains strong, especially in infrastructure.
During April–September 2019, private domestic investments rose 9.5 percent compared to 8.4 percent in the same period last year.
According to data released by the Ministry of Statistics & Program Implementation. In September 2019, the RBI raised interest rates for the first time in almost eight years.
The government plans to invest in infrastructure development, particularly in rural areas. The government provides tax incentives such as a 100% deduction on new manufacturing units set up within five years of commencement of operations.
To encourage industrial expansion, Foreign direct investments into India stood up from in the previous fiscal year. Between January 2013 and March 2019, total foreign direct investment inflows into India totalled.
This amount was invested through the equity route, while the remaining was through the debt route.
What is Retail Franchising
Retail Franchise Business a business model that allows entrepreneurs to open their retail stores and earn income.
In this type of business, the entrepreneur purchases a franchise license for a particular brand name or product line, anything from clothing to electronics.
The entrepreneur then hires employees, buys inventory in bulk, builds out the physical location, and operates the business as he sees fit.
Retail franchises offer many advantages over traditional business models. Some of them include:
- Higher profit margins than most small businesses
- No need for expensive startup capital
- Lower overhead costs than traditional brick-and-mortar stores
- Access to marketing resources and expertise
- Flexible hours and locations
- Ability to scale quickly and easily
In addition to these benefits, retail franchises also provide stability and security for new business owners. Most importantly, they give you access to proven systems and processes that help your company succeed.
How does one go about opening an online retail franchise business
Opening an online retail franchise is quite simple but requires significant planning and preparation. You will need to ensure that you have all the necessary licenses before starting off with your business. A good franchisor will assist you in getting the required licenses.
You must have a team of professionals who are experts in their field. For example, if you want to start a fashion clothing business, you would require people who know how to create quality products, market them effectively, advertise their products, manage salespeople, etc.
You must also ensure that your website is user friendly and easy to navigate. It must also design to attract customers towards your products.
Once you have developed a clear idea of what kind of business you want to launch, find a suitable niche for your business. Make sure that the niche you choose is not overcrowded and is profitable.
India The Next Big Hot Spot for Global Franchisors
The Indian franchising industry is predicted to grow at a rate of over 25% annually, with the total franchise market valued at $4.5 billion by 2016 – up from an estimated $1.3 billion in 2010.
And yet despite this growth and the strong demand, there are still very few global franchise brands operating in India.
In fact, only 14 companies have been listed on the NASDAQ since 2003 (and four more have gone public since then), compared to 567 listed on the NYSE.
While the number of listings on the two exchanges may seem similar, the difference lies in the fact that the NASDAQ is an international exchange while NYSE is restricted to US stocks only.
This means that globally traded firms such as Google (NASDAQ) and McDonald’s (NYSE) are available to investors across the globe, whereas local firms like Tata Steel (LSE) and Reliance Industries Limited (NSE) are only accessible to domestic investors.
What is the most profitable franchise to own in India
The most lucrative franchise to operate in India is likely to be the food & beverages sector. According to data compiled by Euromonitor International, the food & beverage category has grown steadily during the past 10 years, increasing its share of the overall consumer goods market from 9.2% in 2001 to 11.7% in 2011.
Furthermore, it is expected to maintain its position as the largest consumer product segment in terms of value for the next five years.
A recent report by Technopak estimates that the food & beverages sector could reach $40 billion by 2020, growing at a CAGR of around 7%.
With the average annual income of Indians currently hovering at around Rs. 16,000 ($300), consumers can afford to buy several meals per week and thus this particular category is poised to generate consistent revenues.
Franchise opportunities in other sectors include:
– Automotive – which grew 2.9% between 2009 and 2012, according to data provided by Technopak;
– Education – which was one of the fastest-growing categories in the country, expanding its share of the education market from just 1.6% in 2009 to 3.1% in 2012;
– Healthcare – which expanded its share of the healthcare market from 6.8% in 2008 to 8.0% in 2012;
In addition to these traditional categories, new franchises are being created every year that cater to the specialized needs of consumers. Some examples include:
– Beauty – which includes hair salons, nail parlours and skincare clinics;
– E-commerce – which encompasses online retail stores, e-commerce portals and logistics services;
– Entertainment – which offers entertainment centres, cinemas, hotels, restaurants and bars;
– IT solutions – which provides software, hardware and internet-related products;
– Leisure – which includes amusement parks, theme parks, museums, sports centers and adventure activities;
– Logistics – which includes courier services, express delivery.
How much do you need to start a business in India
According to Raghu Krishnamurthy, Director, Franchise India, “Starting a business is not easy – especially when you are doing so without any prior experience or knowledge of running a business. It takes time and effort and requires immense patience.
However, there is no dearth of information on different types of businesses out there. One can find all sorts of books, magazines and videos on various topics ranging from marketing techniques, finance, operations etc. Moreover, one can also get guidance from experts who have successfully run their own enterprises before.”
He adds that once one receives some basic understanding about starting up his/her own business, then he/she should go ahead and try out small ventures and see how things work out. The more successful ones can then expand their businesses gradually.
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