Franchise Market in India

An Expert's View about Foreign Direct Investment in India

Last updated: 13 Mar 2011

Summary

The $3.3 billion franchise market in India has the potential to grow to $20 billion by 2020, with an impressive growth rate of approximately 30% per year. Presently, there are 1,200 franchisors in India, of which 25% are of international origin, with U.S. companies the most prevalent. The four fastest growing sectors in the Indian franchise industry are: food, education, retail, and services.

Franchising in the services sector represents lucrative opportunities as it is competitive, low cost, and provides high returns on investment. 55 percent of India’s GDP is contributed by the services sector. Education and training services, professional services, and hospitality services tops the list of growing subsectors in the services franchise sector. This franchise report on services will focus opportunities in professional services such as personal care services (beauty, cosmetics, and wellness), education/child care services, tourism/travel, and financial services.

Market Demand

India is a rapidly changing country. India is witnessing an unprecedented consumption boom. While the rest of the world still faces the impact of the economic slowdown, India is growing at approximately 8% per year, the second fastest growing economy in the world. This rapidly growing economy has led to a population of over 300-350 million middle income Indians with high disposable incomes. This group continues to fuel the consumption demand in India. The many factors that contribute to increasing consumption include the emergence of a young urban elite population with increasing disposable income, changing lifestyles, mounting aspirations, penetration of satellite TV, increasing appetite for western goods, international exposure, options for quality retail space, and greater product choice and availability.

The Indian population of one billion is growing at a rate of 2.5 percent per year. Of that total, about 300-350 million have the demand for, and the discretionary income to purchase, premium products and services. Many in the growing "middle income" segment look for international quality products and this trend is likely to continue for the next five years and beyond sustaining the demand growth.

 

Read the full market research report  


Posted: 30 November 2010, last updated 13 March 2011

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