Why are franchises in India and Asia most successful?
India and Asia are home to fast growing economies, huge populations and a lot of potential. Franchisors began exploring the continent and subcontinent decades ago, and today many major brands have a presence across the region. As well as high levels of interest from consumers in franchised brands, more and more entrepreneurs in the region are looking at franchising as a way to create a lucrative and sustainable business venture.
Food, drink and retail continue to be among the strongest areas for growth for franchises in India and Asia; however, every year companies in increasingly diverse sectors move into the area. With the market for consumer products growing continuously, now could be the perfect time to get involved in the franchise industry on the Asian continent.
Buying a franchise in India
With over 1.3 billion people and an incredibly fast-growing economy, India is a prime market for franchises looking to expand. Many brands spotted the potential of the country years ago, and as a result a number of international businesses already have franchises in the country. According to some experts, the Indian franchise market alone is worth an estimated $24 billion, with growth expected to hit $35 billion by 2020.
The second-fastest growing economy in the world, consumer spending in India has increased by a whopping 75% in the past four years. A lot of this spending takes place in franchised businesses, with brand recognition a major draw for Indian consumers. By the end of 2017, franchising was set to contribute 4% of the country’s GDP, with around 3,000 franchised brands currently competing for their share of the marketplace. Some of the key industries for franchised brands in India are food and drink, retail, health, education and customer services. However, with such a huge potential customer base almost any brand should be able to carve out a niche for itself on the subcontinent.
Best franchises in India
One of the most prominent franchises operating in India is the popular Sandwich Franchises chain, Subway. Having first launched on the continent 16 years ago, it’s already an established brand in many of India’s cosmopolitan cities. Currently the sandwich chain has branches in Mumbai, Delhi, Chennai and Bangalore and has plans to expand to other parts of the country as well. The eatery’s well-established brand identity and affordable, healthy sandwiches have both helped it to make a name for itself in India’s urban centres.
Another American brand currently making it big in India is Baskin Robbins. The world’s largest chain of ice cream speciality shops, Baskin Robbins’ American flavours and branding have proved popular with Indian customers. As well as India, Baskin Robbins is operating in several other countries in Asia including Bangladesh, China, Nepal, South Korea, Thailand and Singapore.
The franchise is a popular choice for investors as it offers a good potential for returns with relatively low start-up costs. As it’s been operating in India since 1993, the company can also show investors a proven track record of success and demonstrate good brand recognition among customers. Once franchisees have invested in the business, they’ll be offered on-going training and support to help to ensure their venture is a success.
Surprisingly for a country with a vegetarian population of around 30%, McDonalds is a popular eating option for many in India’s towns and cities. The way McDonalds won the country round was by localising. Restaurants in different regions offer dishes that reflected local flavours and cuisines. For example, in many parts of the country McDonalds serves no beef or pork and instead offers a good choice of meat-free alternatives. Catering to local tastes helped this mega-franchise to quickly establish itself on the Indian market and quickly grow its presence across the country.
Buying a franchise in China
Another major Asian market, the population of China is currently around 1.4 billion. At the moment, the country has over 4,500 franchises, which together have created around five million jobs nationwide.
The franchise industry in China is dominated by traditional markets like food retail franchises and store front retail. In fact, around 40% of franchises in China are involved in these industries. Some of the best-known American franchises in China are McDonalds, KFC and Pizza Hut. Many of these brands first opened restaurants in the country in the early 1990s and diners flocked to these new, novel eateries. Recently, however, many of these big brands have begun to face serious competition from Chinese franchises, many of which have opened in the past few years.
This hasn’t put off these well-known brands though, and most are still working to carve an even bigger market for themselves in the country. McDonalds, for example, recently completed a re-franchising programme that saw the company create the largest franchisee outside of the US. As in India, McDonalds in China has introduced a number of local dishes to the menu and worked hard to cater to different tastes in the country’s towns and cities.
Buying a franchise in Philippines
Although a smaller market than both India and China, the Philippines is an important franchise hub for Asia. The expansion of franchising in the country has been strong year on year, with the head of the Philippine Franchise Association, Samie Lim, predicting growth in the industry of up to 30% in the next three years.
As with many other countries in Asia, it’s food and drink where the most money is to be made. Large American fast food chains have a major presence in the country, and the Philippines also has a number of franchised food brands of its own.
The biggest fast food brand in the country at the moment is Jollibee. The now ubiquitous eatery started out life as a humble food stand in 1978 and has grown to become one of the most recognisable names in Philippine cuisine today. The brand offers very affordable meals and many people in the Philippines eat at the restaurant on the regular basis. The brand is still expanding quickly, ensuring there are plenty of opportunities for franchisees looking to invest.
Another popular food franchise in the Philippines is Potato Corner. Virtually unique among fast food brands, Potato Corner focuses on serving just one product: the French fry. With over 400 locations across the country, this model seems to be working for the brand and it’s currently looking to expand its operations even further. For franchises who are fans of the potato, this could be a once-in-a-lifetime opportunity.
Aside from food and drink, retail is one of the strongest franchise markets in the Philippines. Convenience store chain 7-eleven has a strong presence in the country as well as in other parts of the Asian continent. Since 1998, the brand has asked investors to become franchisees and open new branches across the world. As well as the Philippines, 7-eleven is also present in Thailand, Hong Kong, Indonesia, Japan, Macau, China, Malaysia, Singapore, South Korea and Taiwan.
With a huge potential market just waiting to be tapped, India and Asia offer a large number of lucrative opportunities to business people in a wide range of industries.
If you’re currently looking for the opportunity that’s right for you, take a look through our site to find out more about franchising and the wide range of investments available around the world.