Franchising industry can touch $50 billion by 2017, likely to contribute 4 pc to GDP: Pepsi India CEO D Shivakumar

PepsiCo India Chairman and CEO D Shivakumar sees an upward growth of franchising industry in India. He said the industry can reach USD 50 billion by 2017 and create 11 million additional jobs.

"By 2017, the opportunities for franchise business model in India would be USD 50 billion and the big ones would be in sectors such as apparels, consumer deliverables, electronics and mobile," Shivakumar said here at the World Franchise Congress 2015.

The industry is currently estimated to be around USD 30 billion with an annual growth of 30 per cent. Shivakumar predicted that it could create 47,000 new companies by 2017 as India has a new breed of entrepreneurs," he said, adding that it is expected to contribute almost 4 per cent of India GDP in 2017.

Elaborating on sectors which would contribute majorly, he singled out apparels, with USD 11 billion, followed by consumer deliverables, electronics and mobile (USD 11 billion), furniture and furnishings (USD 5.3 billion), and pharmacy and jewellery with USD 4 billion and USD 3 billion, respectively.

Shivakumar said for over 100 years, franchising has been a fundamental driver of PepsiCo's success, which today covers more than 120 countries. It has build strong partners across the country in the last 25 years.

"PepsiCo India's north operations are franchisee operated and the company works closely with various beverage bottlers to build a strong footprint of brands which are the first choice of consumers," he said.

PepsiCo is focused on strengthening both COBO (company-owned bottling operations) and FOBO (franchise-owned bottling operations), he added.

When asked about present scenario for franchising, he said, "India has the correct franchise business environment as other have...we believe that the franchise model is the future business model of the industry".

On being asked that from where the opportunity would come, he said, "It would across the country, as luxury goods would be in the metro cities, QSR (quick service restaurants) would be across the country, and apparels would be in tier II and III."

(Image credit: BCCL)