Wednesday, 21 August 2013

Bangalore a Favourite Market for Debuting International Brands

Thanks to lower rents and a more cosmopolitan crowd, Bangalore is fast outpacing Mumbai and New Delhi.

Bangalore seems to be the favourite testing ground for international brands debuting in India. Besides its cosmopolitan nature, the comparative cheap rentals to set up a store here make it the first choice for brands abroad.

Sample this: To set up a store in one of the leading malls in the city, the rentals vary anywhere between Rs190 and Rs400 per sq ft. The average rate for the same in Delhi and Mumbai is about Rs500 per sq ft and Rs650 per sq ft respectively.

“The market is as good as Delhi and Mumbai with lower rentals. Hence, it makes more sense to set up a store in Bangalore first and see how the response is. Mumbai and Delhi are important markets, but the rentals are on the higher side,” says a real estate consultant.

Not only cheap rentals, but also Bangalore is viewed as the ‘city of class’ by international brands. After Krispy Kreme’s debut earlier this year, Kids Kinderdreams, an Indo-German joint venture company to market German babycare products and toys in India, marked its entry by registering in Bangalore first.

“Bangalore is an important market for us. We never had two thoughts on whether we wanted to debut in Bangalore or not,” says S Sampath Kumar, founder & managing director, Kinderdreams.
Players who marked their India entry through Bangalore share the same thoughts. “It is better to test the water here than in bigger markets like Delhi and Mumbai, where rents are sky high.

Bangalore, in this respect, is perfect. The crowd in the city is more cosmopolitan when compared with Mumbai or Delhi and the market size is neither too small nor too big,” says founder and managing director of one of the companies which recently launched itself in the city.

“The percentage of people who are young, have high income and international exposure is higher in Bangalore when compared with other big cities in India. Hence, international brands prefer to mark their Indian entry through Bangalore,” says Harminder Sahni, founder and managing director, Wazir Advisors, a consulting firm.

The past two years have seen about eight to 10 international brands making Bangalore its first market in India. In fact, the city was also the first to witness the India entry of brands like KFC, Taco Bell, Tommy Hilfiger and GAS among others.

“The demography of the city matches expectations of an international brand. It is a good testing market wherein you can feel the pulse of country. People from different cities have their presence in the city,” says Audrey D’Souza, regional director, Indo German Chambers of Commerce. According to her, there are more than 150 German companies that have started their India journey through Bangalore.

[ Source - DNA]

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