25 Nov 2013
Marks & Spencer announced in early November an introduction of more than double their current stores in India by 2016, making it their largest international market outside of the UK.
The British retailer currently operates in India through a joint venture with ‘Reliance Retail’, and plans to increase the number of their stores from 36 to 80 over the three years. Global Chief Executive, Marc Bolland, has been advocating the push in India, from their initial priority market of China, since he joined the company in 2010. Bolland’s grand plan for India is primarily due to a decline in global sales for nine consecutive quarters.
Critics are sceptical of M&S’s big bet on India, arguing that consumers in the market see the brand as too expensive, preferring local brands and more contemporary style labels like Zara and Mango. Bolland is optimistic however, and believes consumer perceptions are already changing due to a new business strategy of mid-prices but high quality products.
Marks & Spencer and Reliance Retail reported a 28% increase in revenues (roughly USD 59.5 million) from 29 stores at year’s end in March. On the other hand, the joint venture between Zara and Trent (India’s Tata Group), recorded a 56% jump in sales at USD 64.3 million during the same period, with only 9 stores.
A key factor in this equation is that M&S sources 64% of their merchandise sold in India locally. Moreover, the brand sources more than one-third of their global products from Asian countries such as India, Sri Lanka and Bangladesh.
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