The UK's Marks & Spencer (M&S) has plans to position itself as a mid-market mass retailer in India and is eyeing a chunk of its revenues from India in the next few years.
Raghavendra Kamath caught up with M&S CEO Stuart Rose to understand the company's India plans and strategies. Excerpts:
Why did you choose to go with Reliance Retail?
We had several companies to choose from, but we partnered with Reliance because we share similar philosophies at work. Moreover, Reliance moves quickly in its line of businesses and has the right understanding of the market and infrastructure. It is a good partner.
But you already had an agreement in place with Planet Retail.
We felt we could not move as quickly as we wanted in the previous arrangement. We have full respect for V P Sharma (of Planet Retail) and our relations with him are very cordial. With Reliance, we hope we will be able to scale up quickly and garner higher volumes.
What will happen to the 14 stores you set up under the joint venture with Planet Retail?
Ultimately, those stores will be absorbed in our current partnership. Our teams are working on that and it will happen over a long period of time.
Have you taken a no-objection from Planet Retail before going ahead with Reliance?
We have had a series of meetings with them and only after convincing V P Sharma, we went ahead with the new plans.
M&S is perceived as a premium high market retailer. How will you position the brand in India?
In the last four to five years of our existence in India, we have recognised the market in the country. We will reposition ourselves as a mid-market retailer in terms of price, quality, service and innovation once we get the go-ahead from FIPB (Foreign Investment Promotion Board). We will not be the cheapest, but a quality player. We will exactly position ourselves in India as we are in the UK.
Why did you plan to beef up your India operations when you could have entered into new markets?
We see India and China for our future expansion. We were busy shaping up our business in the UK and once we sorted out our plans, we started focusing on India.
The whole idea is to take total overseas revenues from 7 per cent now to 20 per cent, going forward. I would be disappointed if we do not make hundreds of millions of revenues here instead of tens of millions.
What are the challenges you foresee as you move ahead in Indian operations?
In India, you have to move very quickly to attain scale. I feel the property market and the laws are very complicated here. We had to understand them. That is why we chose to go with Reliance, which has the understanding of these factors.
How has the global slowdown and market crash impacted your global sales?
There is no doubt that both Europe and the US are seeing tough times in terms of liquidity crunch and slowdown and it has impacted consumer spending also. Western economies have seen a fairly long growth phase and now we are seeing a short correction. We expect this as a short-term phenomenon and have to adjust ourselves accordingly.