21st Franchising Conference 20th October 2006 Milan

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21st Franchising Conference 20th October
2006Milan

• Presented by
• Arun K. Khetan
• FAI - INDIA

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INDIA

• 5,000 year old ancient civilization
• 325 languages spoken 1,652 dialects
• 18 official languages
• 29 states, 5 union territories
• 3.28 million sq. kilometers - Area
• 7,516 kilometers - Coastline
• 1.3 Billion population.
• 5600 dailies, 15000 weeklies and 20000
  periodicals in 21 languages with a combined
  circulation of 142 million.
• GDP 690 Billion. (GDP rate 8.5)
• Parliamentary form of Government
• Worlds largest democracy.
• Worlds 4th largest economy on PPP terms
• World-class recognition in IT, bio-technology
  and space.
• Largest English speaking nation in the world.
• 2nd largest pool of scientists and engineers in
  the World.

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Franchising Current Indian Scenario

• Franchising in India growing at 25 - 30 pa
• Franchising accounts for 3 of Indias retail
• Estimated Franchising market is approx 2
  Billion
• Approximately 1000 Franchising systems are
  already operational in India.
• India is witnessing Retail Revolution.
• No dedicated legislation but Govt. has announced
  to have one shortly.

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Indian Economy

• India is today an Economic power house..,with
  economy growing _at_ 8 and expected to grow _at_ 10
  in the years to come.
• India is 4th largest on PPP terms and expected to
  be 3rd largest on GDP by 2050 Goldman Sachs
• With 650 bn market cap, India is the largest
  emerging market after Korea.
• Service Industry approx 54 of GDP, with Indian
  GDP almost doubled over last decade..
• A country of billion plus with growing PPP,
  almost grown 10 times in the last decade.

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Indian Economy

• Expansion of Service Industry (a gender unbiased
  industry) resulting in more more working
  women, hence larger population contributing
  towards GDP.
• An estimated 311 bn spend on Infrastructure
  over FY 0712 will further spin off the pace
  of economic growth
• Internet and technology changing the way of
  life, Globalization at its peak leading to
  re-alignment of transborder socio-economic
  relationship.
• Many of fortune 500 companies are setting up
  their R D bases in India.

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How to Develop Franchising In India

• Initial Target segment Identification market
  survey
• - Networking with Franchising Associations
• - Participation in Expos, Seminars Retail
  Exhibitions
• - Specialised Consultancy
• Product Concept Communication
• - Media Electronic Mediums
• - Indian News Print
• Final Launch
• -Selection of appropriate workable
  franchising setup, eg Master Franchisee /
  Unit Franchisee etc.

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SPECIALITIES OF INDIAN MARKET

• A continent in itself with almost all the
  extremities of Nature.
• It has 325 languages and 1652 dialects. Its
  probably having the largest muslim population
  in the world though known as a Hindu state
  A truly secular country
• The height of secular nature is that despite
  being a largely hindu dominated state, an
  Italian catholic lady is the head of the
  largest political party, our President is a
  muslim, and our Prime Minister is a sikh.
• Largest democracy of a billion plus 16 of
  world population with huge domestic consumer
  market growing day by day with growing quality
  awareness..

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SPECIALITIES OF INDIAN MARKET

• India, today the Youngest Nation, the back office
  of the world and Indians the most preferred
  workforce around the globe, with more than 60
  of global off shoring..
• It is having the extremities of nature. While
  one market is situated at the highest altitude
  LEH, whereas another markets are at sea
  level Kerala
• An affluent middle class expanding day by day.
• A filthy rich population of approx. 3 4
  Millions NRI, an excellent source to
  channelise your investments.

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Franchising Opportunities in India
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PROMINENT GLOBAL PLAYERS IN INDIAN FRANCHISING
SCENARIO

• McDonalds
• Wall Mart
• Sub way
• Pizza Hut
• Dominos
• Papa John
• TGI Fridays

• Medicine Shoppee
• Cookie Man
• Gloria Jean Coffee
• Costa Coffee
• Body Shop

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Leading Italian Brands with future in India

• High Fashion Valentino, Armani, Versace,
  Gucci, Trussardi, Bulgari, Moschino, Donna Karan,
  DG, Prada, Chanel, Salvatore,Ferragamo
• Spirits Campari
• Kidswear Monalisa
• Sports fashion Kappa
• Mens Footwear Fratelli Rossetti
• Mens wear Morzotto

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Leading Italian Brands with future in India

• Olive oil brand Bertolli
• Automobile Fiat
• Insurance Generali
• Eye wear Rayban, Killer Loop
• Confectionery Perfetti

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Core Opportunities Limits in Indian Market
India among top 10 FDI destinations in the
developing world currently the 2nd most
preferred after China.
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Core Opportunities Limits

• Declared second most attractive destination for
  retailers among 30 emerging markets.
• Emerging economy - ability to identify the
  trends and seize the appropriate moment for
  entry into the market.
• Huge unexplored space in retailing franchising
  sectors.
• Early mover advantage.
• Availability of low cost resources.
• Largely religious with strong sentiments. (Beef,
  Pork)

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Advantages for foreign franchisors

• Prior presence of seasoned franchisors like
  McDonald, Marks Spencer, etc
• Multi ethnic Society that has varied demands.
• Flourishing Class of Urban customers with
  considerable disposable income.
• Growing Brand awareness among consumers.
• Media Exposure continues to fuel consumerist
  lifestyle.
• Space for almost every possible product
  services.
• Opening up of markets in tier 2 tier 3 cities
  in addition to shooting demands from existing
  metro / semi metro markets.
• Franchising still in formative stage in the
  country, hence opportunity to fiilip the gap
  yet to reach its peak.

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Some current Franchising news
- Papa John to open 500 Pizza outlets in
India over next 10 years - McDonalds plans
40-50 restaurants in South India - Cookie
Man, an Australian brand plans to open 14 outlets
and 40 express counters across the
country in a period of one year.     - Restaurant
Chain TGI Fridays has picked up 25.1 stake in
its Indian Master Franchisee firm,
Bistro Hospitality Pvt Ltd. Currently 5
outlets.    - Gloria Jeans Coffee, one of the
largest coffee chain in the world, plans
entry in Indian market. Source
www.franchise-chat.com
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Some current Franchising news
    - Bullish on India, Britains Costa Coffee
plans to open 290 outlets in next 4
years.     - Crustum products to bring Asian
bakery chain Bread Talk to India.     - Largest
postal system in the world, Indian Department of
Post, to go for franchising.     -
Medicine Shoppee , worlds largest chain of
retail pharmacy chain has identify India
as its fastest growing market and planned to set
up 700 outlets.Currently 100 outlets.
- The Body Shop, worlds leading high end
personal care retailer is entering
India. - Reid Taylor to add 150 outlets.
More than 3000 outlets presently. Source
www.franchise-chat.com
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Thank You