Marks & Spencer enters Indian market

The store retains an up-market image in India

By the BBC's Alastair Lawson in Delhi

It may be cutting back in Britain and Europe, but Marks & Spencer is expanding in India.

New stores have opened this week in Delhi and Bombay under a franchise agreement with an Indian company called Planet Sports.

Marks & Spencer is a famous brand name here and people are prepared to pay more to shop our stores

VP Sharma, Indian franchise owner

Initially the new stores will sell clothing and bath items only, but the franchise owner in India, VP Sharma, says that he has long term plans to sell food and expand the network of shops into other Indian cities.

"I have been requesting Marks & Spencer to allow me to open a branch here for the last two years, because I'm convinced there is a market here", he said.

Mr Sharma says the reasons why Marks & Spencer lost money in Britain and Europe recently do not apply to India, where the store retains an up-market image.

Good reputation

The company is going to have to rely heavily on what it says is its good reputation with middle class Indian shoppers if it is going to make money.

The stores will sell only clothes and bath items

Over 90% of the clothes in the Bombay and Delhi branches are imported from abroad, with quality control tests carried out in London.

That means that shoppers have to pay extra in Indian taxes.

The policy of importing from abroad is in contrast to other well known Western brand names such as Nike and Lacoste, which keep their prices in India lower because their clothes are manufactured in South Asia.

'Small store'

The store's commercial manageress in Delhi, Juhi Chauhan, says that shoppers in India will not mind not having separate rooms for ladies and menswear sections.

"Its quiet a small store here in comparison to branches in the West," she says, "so its harder to have distinct segregation."

She says that eventually Marks & Spencer branches in India will soon start selling food, which has earned it such a good reputation in the West.

"But at the moment its not feasible to bring perishable items into India, even though I'm sure all that will change soon in these days of globalisation", she said.

India's retail sector lags behind many other Asian countries including China and Indonesia.

Many items are still sold in bazaars and open air markets.

That is in contrast to Thailand, which is now estimated to sell around 40% of all consumer goods through supermarkets and department stores.

But with India's middle class growing increasingly prosperous Marks & Spencer says there is a growing market that is waiting to be tapped, especially in affluent areas of Bombay and Delhi.