Posted on August 30, 2010, 11:07 am
The newly opened City Centre Mall in Kathmandu, boosting Retail and Franchise Business"]
Several Indian Franchisors are now considering expansion overseas, one of India’s closest neighbours and strong allies is Nepal. Nepal is a land locked country, with a population of 30 million.

During our last visit to Nepal, we interacted with a few local franchisors and also represented a delegation to Nepal, along with a couple of Indian master frachisors and one international one. This was way back in 2008, during my previous assignment with Franchising Association of India.

This article will provide insights for international franchisors (Indian and around the world) that are looking at expanding at Nepal.

Franchising in Nepal, is evolving but still in its infancy. As per the Nepal Chamber of Commerce and Industry, there are 95 franchisors operating in Nepal. Most of the franchisors operating in this country are Indian or have Indian master franchisees, apart from a few from Singapore and Thailand. In comparison to our previous visit, the Franchising market in Nepal has strengthened and opened up.

Some of the Indian Brands that are present in Nepal are Gini and Jony, Time Square, Planet Fashion, Raymonds, Angan (North Indian Food Franchise), Lilliput, Big Cinemas, John players, Peter England, Provogue, Yana Sizzlers (Pune Based food franchisor), Kendriya Vidyalaya, Patanjali Chikitsalaya, Aptech, NIIT, Eurokids and many more.

Some of the other international brands that have Indian master franchisees are United Colours of Benetton, Cookie Man, Baskin Robbins, Pizza Hut, KFC, Wimpy, Hot Breads, Puma, Reebok, Adidas, Kinkow and so on.

Franchisors that have a good potential are those that are operating in education, Healthcare and retail sector. The Indo Nepal Treaty for Peace and Friendship 1950 has encouraged a lot of tourism between the two countries as well as transacting between the two nations. Trade between the two countries is only going to increase, thanks to the recently signed trade pact. Several airlines, mainly, Kingfisher, Jet and Air India fly between the two countries.

Some of the other factors that are leading to an increased consumption of Indian goods and services is the cultural and linguistic

"KFC Food Franchise Opens at Kathmandu, hundreds queue up to taste KFC"
CY Pal
similarity, as well as Bollywood and Indian Televisions, have led to a better understanding of Indian Entrepreneurs and Businessmen. During our recent trip, we red in Kathmandu Post, about Shriram Chandra winning the Indian Idol. Karobaar has a strong Indian influence as well. The current Prachanda Govt. is slowly yet gradually reforming its economy. Blackberry Services after years of wait, was finally offered to Nepalese businessmen.

International Franchisors have a great opportunity at hand and should not loose this opportune time. Another major advantage for Indian Entrepreneurs is the fact that Nepal has minimal competition, several daily goods and service are more expensive than in India.
Financial Services
The Nepalese Stock Exchange currently has only 63 companies (In comparison to BSEs 4900 not considering the NSE and other exchanges) listed, the capital markets are yet to be completely tapped. Several Indian financial services franchises can grow aggressively considering their expertise in one of the most competitive markets. The Nepalese look at investing in Indian stocks and companies.
Nepalese students in the pursuit of better and higher quality education keep considering overseas education. The current level of education provided is not helpful; hence several vocational training institutes are flourishing. Overseas Education and Study Overseas Franchises are thriving, consider these numbers that over 27000 left for western countries and 15000 for Indian education, spending over (USD 265 Million / INR 1250 Crores)

Recently Dabur and a host of other Indian joint ventures announced additional investments, this will lead to a greater need for skilled and talented workforce. Vocational Institutions be it English Learning Franchises or Retail Shop Floor Training Franchises have experienced phenomenal growth.
Retail Trade
sThe gradual opening of the economy has lead to greater consumption. In Comparison to our previous visit, malls not sport International Brands, The Sherpa Mall at Darbur Marg houses several fashion and luxury brands that include Tissot, Apple, Swatch, Time World, Magic Beans, Puma and so forth. However, a word of caution, credit card users are penalised in Nepal and hence transactions cost 4 per cent more.

We visited Abhinandan, a high end saree store that has also reported an increase in sales, the entrepreneurs behind Abhinandan, already plan to franchise their retail concept overseas.

One of the newly opened malls, which was advertised as the only Air Conditioned Mall in Kathmandu, the City Centre Mall has several Indian Brands as well as Big Cinemas Multiplex. It is currently offering NPR 175 (INR 109) Rental and NPR 25 (INR 15.5) as Common Area Maintenance. This is quite reasonable for an upscale mall.

A significant portion of business in Nepal is influenced by Indian Marwaris (An Indian Trading and Business Community). Unsurprisingly, most of the enquiries we get from Nepal are from this community.