The "Hidden Rules" Of Fashion Brand Globalization

　　 The Indian market where you have to pay bribes to open a shop

Hong Kong entrepreneur Ramesh Tainwala once spent 18 months running the brand clothing In the matter of sales in the Indian market, after such a long time of research, he figured out one thing: if you want to successfully start business in India, it is impossible to do without bribery.

The 55 year old businessman once owned the franchise rights of American fashion brands Guess, Nautica and British retailers Next and Debenhams in India. But last September, he sold them to Indian enterprises.

According to foreign media, Tainwala, now the president of the luggage brand Samsonite in Asia Pacific and West Asia, said reluctantly, "It is impossible to do business in the Indian market without offering bribes." He claimed that he had refused to offer bribes to officials who had the power to issue business licenses in the past.

As the next battlefield for retailers to seize, India's retail market has reached 500 billion dollars, and is still growing at an annual rate of 20%. At present, the market is still dominated by small stores, and world retail giants such as Wal Mart and IKEA finally gained the right to enter last year through hard efforts.

But a series of daunting "licenses" forced retailers to pay so-called "fast money" through middlemen or local partners to open stores. A traditional supermarket needs at least 40 kinds of licenses if it wants to successfully open in India. Shelves, window advertising posters, etc. require separate licenses. Want to play music in the store? Get the license first.

"There are many departments involved, and the number of licenses required to open a store is puzzling." The above Xinxiu executives complained.

It is precisely in the process of obtaining the above-mentioned various licenses that many bribes have arisen, which has virtually increased the operating costs of retailers and weakened the profit space. At the same time, this also increases the risk of enterprises, because bribery, which is common in India and other emerging markets, is still illegal in other markets.

britain shoes A senior executive of the brand Clarks also said that a full year business license applied by the company since 2012 has not been approved. Clarks' plan is to open five stores in India, three of which need to obtain permits. Clarks is required to pay 60000 rupees to each of the eight officials of the approval department for each store that needs to obtain permits, and 500000 rupees is actually paid for each store to obtain permits, while the official fee is 6000 rupees for each store.

　　 Confusing false with true

Bribery costs arising from various "licenses" make high-end brands in India helpless. In Vietnam, another emerging luxury market, luxury brand store owners try to evade import tariffs by various means.

Unlike other vendors who illegally manufacture or sell luxury goods, those sold in Gucci and Milano stores in Ho Chi Minh City are authentic handbags. However, in order to avoid import tariffs, the two stores lied that their products were cheap counterfeit goods from China and each was worth less than $7. In fact, the products in the stores are imported from Italy and then shipped to Vietnam in Hong Kong.

In November 2012, local police seized handbags full of Gucci, Docle&Gabbana brands clothes Four trucks were driving to the warehouse of the two stores in the basement of Sheraton Saigon Hotel. After investigation, it was found that these goods were imported by a Hong Kong company called Nam De Company, and then each piece was cleared at a price of US $1.8-7 from China.

A police officer of the Economic Crime Investigation Division told the local media in Vietnam that the goods displayed in the two stores were priced at millions of Vietnamese dong, but they did not indicate that they were made in Italy. The turnover of the two stores in 2012 exceeded 12 billion Vietnamese dong (about 571500 dollars). Three customs officers were suspended for collusion in tax evasion.

Ta Giang Linh, one of the suppliers in the Vietnamese luxury market, was also found by the customs to import Gucci and Yves Saint Laurent goods from Italy, France and other places in the same way, and only paid more than 2500 dollars of import tariffs. According to the actual value of the goods exceeding 190000 dollars, the payable tariffs exceeded 76000 dollars.