The UK India Business Council have identified a number of emerging opportunities and challenges for UK Companies in India’s Fashion and Beauty sector in a joint report with Cluttons, launched at an event on the Indian consumer with Mark Ashman, former CEO of Marks and Spencer’s India.
The UK India Business Council report ‘Fashion and Beauty Sector India – Market Entry Opportunities for UK Companies’ found that, spurred by greater disposable incomes, India has seen a large increase in demand for foreign brands, particulary British brands.
It was also found that a rapid growth in India’s e-commerce sector and the development of organised retail space, such as malls, is opening up fashion and beauty opportunities to UK companies across India. In particular, in India’s tier II and tier III cities, which have previously been less accessible to foreign brands.
Encouragingly, the report identified an increasing number of pioneering British brands, including Burberry, Lush, Pavers England and the Body Shop who are already accessing, and more importantly, reaping the benefits from these growing opportunities.
The report also catalogued a number of challenges in India, which UK companies need to fully understand before committing to the sector, including India’s complicated tax compliance structure and, even with recent reforms to FDI regulations, its regulatory environment.
However, despite the challenges, the report found further room for optimism for UK companies looking for a route to market. In particular a proposed simplification of the tax regime through the implementation of a Goods and Services Tax (GST) which is expected to significantly simplify taxation rules, especially for new entrants to the market.
Speaking about the report Richard Heald, CEO, UK India Business Councilsaid “Growth in India’s Fashion and Beauty Sector is driven by a burgeoning middle class – particularly from a young aspirational professional urban class with a growing disposable incomes. In fact, over the next two decades India’s middle-class will grow to over 40% of population, creating the world’s fifth largest consumer market. ”
“As a result India’s organised retail sector presents immense opportunities for UK Fashion and Beauty companies, which benefit from India’s continuing love affair with British brands and belief. In the minds of Indians, UK brands represent style and quality. As such, UK companies have a unique opportunity across India.”
Speaking about India’s retail sector was Mark Ashman, former CEO of Marks and Spencer’s Reliance India and HyperCITY India said “India’s retail sector continues to go through a period of incredibly exciting transition, with both single and multi brand retail formats as well as International brands becoming increasingly popular amongst India’s aspiring consumers”.