Globalization of High Street UK Brands in the Indian Retail Market and Its Impact on the Culture and Buying Behaviour of Indians.
[Dissertation (University of Nottingham only)]
Since 1991, the year the government began to open the Indian economy to the world, foreign influences have crept into India at a faster pace, challenging one of the world's most insular societies (Fuller, T. 2000).
The Indian government has slowly been opening the market for foreign direct investment in retail. The opening up of India, like other Asian countries will be gradual says Arun Bhardwaj, the man responsible for having M&S and Guess franchises for India (Musgrave, 2005 p. 39)
Amartya Sen (1998) and many others have pointed out that India, as a geographical, politico-cultural entity has been interacting with the outside world throughout history and still continues to do so. It has to adapt, assimilate and contribute. This goes without saying even as we move into what is called a globalised world, which is distinguished from previous eras from by faster travel and communication, greater trade linkages, denting of political and economic sovereignty and greater acceptance of democracy as a way of life (economics.about.com).
The management consultancy A.T. Kearney (1991) ranked India as the number one emerging market for global retailers. It has the fourth largest economy in the world after the US, China and Japan. It is expected to top Chinas population by 2050. GDP per capita is expected to increase by 4% a year for the next 10 years. By 2010, according to Drapers, 49% of households will be classified as middle-to high spending (Musgrave, 2005, p.38). The opening up of more and more shopping malls in India has been creating excitement for the foreign retailers. India is undergoing a huge retail boom and this is apparent with the increasing number of retail space becoming available to retailers; both domestic as well as international. All of the above are included in outlining India as an emerging market. Brands such as M&S, Guess, Benetton, Levis etc have already entered the Indian market via franchises.
Young people in developing countries are the largest consumers of the global culture and global corporations are racing to get a piece in the market (www.phmovement.org). India is one of the youngest countries in the world, with an average age of 24. Globalisation has a lot to do with the consumers; is there a demand in the market? Are the consumers global? Understanding the consumers tastes and preferences (Jean- Claude Usunier. 1996), this is studied in the dissertation as consumers are the key for market efficiency for any company.
Over the years, the globalisation of international brands has been welcomed by consumers in the urban cities of India. However poverty is still a major issue, particularly in rural areas. Globalisation insures new prospects to rural India by providing more jobs. The growth of Indian economy very much depends upon rural participation in the global race (economics.about.com).
According to the WGSN report, some 80 million households have access to cable or satellite (wgsn-edu.com). New cultures and lifestyles were brought into Indian homes through television, kindling new aspirations and opening minds to a wholly different way of life. Brand owners had an audience with new aspirations, consuming new media and influenced by new experiences (www.brandchannel.com).
Raghavendra Rathore, a designer in the western city of Jodhpur, asks a rhetorical question: What happens when a farmer who does not yet have access to piped drinking water tunes in to "Baywatch"? Or MTV. Or HBO, all of which are available across the country. "All of a sudden some of the most remote parts of India are in sync with the West," said Mr. Rathore, who added that he was surprised during a recent visit to a neighboring state to see farmers wearing blue jeans (www.iht.com/articles)
Sociologists have noted that national identity derives in part from a countrys indigenous or popular music; a unique music style can represent the uniqueness of the cultural entity and of the community (Jean- Claude Usunier. 1996). When entering a new market there are a number of things to take into consideration, culture happens to be an important factor to consider. India is a country rich in culture and heritage. The uniqueness of the Indian culture is its composite and pluralistic nature. In no other part of the world has religious and cultural plurality co-existed and cross-fertilized each other so creatively (The Hindu magazine, 2003).
Fashion brands are looking for expansion in the emerging markets. Competition within industries reaches a worldwide scale. This dissertation does not only look at this topic from the countrys point of view, but also examines the limitations of expanding in the Indian market, whether these high street fashion brands are capable of and able to expand into the Indian market. There is a gap in the market for young trendy, low cost clothes, which is important to note as brands like H&M, Zara etc. may be able to fill this gap.
Globalisation has brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer hold out promise improved productivity and higher living standard. But to what extent, will these global fashion retailers impact the culture, the way people dress and the fashion industry in India is further discussed in the dissertation.
Indian consumer attitudes are changing at a rapid pace, with people becoming more aware of westernised products. It is proposed that individuals may feel the need to possess high profile and visible products, and display these products in front of people in their communities (family, friends). This in turn may enable them to re-emphasis or reconfirm their high status, to the society. Therefore, it can be suggested that products are usually used to construct positive images, where Indians might use these products and possessions as symbols of success and wealth rather than for their functional attributes. In other words, the study will further try to prove that such consumption is carried out for reasons such as, symbolic consumption, social pressure to conform, materialism, depiction of high status and image.
Therefore this study proposes that Indians use possessions to construct social identities, which leads to consumption, which can take on a cultural meaning. Thus, products are used to construct positive images of people; moreover, increase in commercialisation has led to construction of identities.
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