Franchise business is helping supermarket chains to expand in India

Franchise business is helping supermarket chains to expand in India

Franchise business sector seems to have recorded highest growth in year 2015-16, expected to grow by US $ 35 billion by end of 2017. Supermarket chains are part of retail franchise business segment, likely touch whooping revenue INR 47 trillion by 2017, and potential international brands waiting for right moment to penetrate Indian marketplace.

Organized market

It refers to professional market where all operational activities are performed under government license. All operators registered for sales, income tax and GST. The organized market share is comprised of popular brands, medium sized retail shops, and corporate-backed hypermarkets. At present percentage of organized market is less but by 2020 near about 20 percent marketplace will be under government eye.

Unorganized market

It comprises of traditional grocery stores, convenience stores, local vendors or hawkers, etc. entrepreneurs operate in unorganized market also comes in government list after implementation of GST.

Retail market is contributing enormously to Indian economy; approximate 14 to 15 percent is added to GDP by organizes as well as unorganized market. Soaring prices of international products didn’t affect consumer pocket because they are habitual to international brands.

Reformation        

To bring more foreign currency in India government allowed international supermarket giants like Tesco and Wal-Mart to operate smoothly. To add more retail furniture brand IKEA a Sweden based company was allowed to own 100 percent business. Several domestic brands like shoppers stop, home stop, etc. developed business in Indian and also in international markets. New laws have been introduced; recent one is goods and service tax. People now-a-days are turning up to modern fashion trends, even middle family income is also increased. Supermarket giants currently operate in India use franchise business model to penetrate local markets.

There are few factors responsible for exceptional transformation includes:

  • Changing lifestyle
  • Increased income
  • Demand for international products
  • Favourable demographics
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