Franchise Talk

India franchise for Index malls

August 8th, 2006 | Author: Jack

Index Living Mall Co, the home-furnishings retail chain, has signed an agreement with an Indian partner to open a franchise in India next year.

Index Living Mall is expected to be the first foreign home-furnishings chain to open in Mumbai, which now has 20-30 small furniture shops.

”India has huge market potential, reflecting the boom of the overall economy during the past four years,” said Kijja Pattamasattayasonthi, Index’s managing director. He said he expected the import tax on furniture in India to decline substantially in the future if free trade talks with Thailand were successful. India currently imposes a 30-35% import tax on furniture.

Mr Kijja said that under the memorandum of understanding, the two parties would collaborate on the development of home-furnishing products with an Indian company, which he declined to name.

”Our partner is a leading listed firm in the retail and industrial sector in India. We’ll disclose the name when the time is proper,” he said.

The Indian partner would make investments in outlets, while Index would supply products and expertise to the partner. Franchise fees have yet to be finalised.

Under the agreement, the Indian partner will open seven Index Living Mall outlets during the first five years. Each requires an investment of up to 300 million baht for a space of 6,000 to 7,000 square metres. The first outlet is expected to open in Mumbai in the first quarter of next year. The company expects to gain annual sales of about 50 million baht from the Indian outlets.

India will be the company’s second foreign market after Indonesia, where it currently has six outlets. Dubai is also in its business pipeline.

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