Benetton, Aéropostale and Tillys — once iconic brands — have virtually disappeared from mainstream malls and shopping centers in the United States. But these valuable brands still have cachet, and today they are just a few examples of companies pursuing new relevance by staking claims in one of the world’s burgeoning retail frontiers: India.

India is one of the fastest-growing large economies and is expected to surpass Germany and Japan to become the third-largest economy by 2025. India has become the land of possibilities, and when you consider that the country offers a growing market of 1.25 billion consumers you can see why.

India represents a $1 trillion retail market and has quickly become the mecca for Western retailers hoping to reinvigorate their brands and grow their revenues. In the past decade, the Indian government has relaxed its rules restricting foreign direct investments (FDI) in certain categories. As a result, 100% FDI is now available for single-brand retail, with dozens of brands entering the India market as a result. They include: The Gap Inc., Aéropostale Inc., Desigual, Levi Strauss, Rider, Ipanema and Adidas AG — which was the first foreign-owned sports company to secure approval to open 100% foreign-owned stores in India.

Let’s examine some of the factors influencing the rise of India’s retail market, including the adoption of mobile technologies and the continued embracing of Western trends.

Mobile Devices and Mobile Consumption on the Rise

Many of India’s consumers are technologically savvy, and mobile has become the leading internet-enabled device for both urban (73%) and rural (87%) users in India. With a steadily growing middle class, and the vast majority of their population below the age of 35 (65%), India is sitting on a mountain of unrealized growth potential for the mobile market.

Reliance Jio, India’s top telecom firm, has been leading a rapid expansion of 4G infrastructure. Paired with low-cost data services, this expansion has increased competition among mobile device manufacturers to meet consumer demand.

The key to gaining share of market in India’s mobile sector lies in providing consumers with a device that offers affordability and accessibility. This holy grail combination has led to the resurgence of the feature phone, a stripped-down device that offers speed without highbrow add-ons like a touch screen. In particular, the extended battery life (days vs. hours) of this no-frills model appeals to users who live in areas susceptible to brownouts.

The mobile device competition will heat up this summer when the Indian government implements a 12% goods and services tax for devices manufactured locally. This is a possible win for imported smartphone models, as they continue to penetrate the market and trends lean strongly toward increased adoption and double-digit growth of smartphones through 2019.

Embracing Western Fashion Trends 

Riding on the coattails of mobile tech trends, 86% of Indian respondents in a recent study said they were likely to make online transactions with their phones. This is good news for retailers both local and foreign as India’s consumers place a priority on fashion and apparel when it comes to online spending. Bangalore-based e-commerce company Flipkart has seen close to 60% of customers making purchases in fashion categories. According to CLSA, India’s fashion market is a $17 billion industry and is growing 25% year over year.

Recent findings also suggest that there is a growing trend among India’s population in embracing Western culture and style. Indo-Western wear, a fashion trend that fuses influences from both cultures, is on the rise among pre-teens. And in a recent survey of workforce populations in top cities in India, 64% said they prefer to wear jeans or denim every day. Levi Strauss, one of the original denim brands in the U.S., was the first to explore India as an emerging market and now boasts 185 outposts country-wide.

Denim growth should outstrip overall apparel market growth over the long term. There’s a massive casualization of work wear [in India],” says Levi India managing director Sanjay Purohit.

And they are not alone, as once-familiar brands like Aéropostale, Lee and Wrangler have taken measures to regain their share of market by entering India. There are rumors that Esprit may make a comeback, too. And then there are the fast-fashion retailers, who are also zeroing in on India’s retail frontier. Zara opened its first flagship in New Delhi in 2010, followed by Mango and H&M.

Stake Your Claim

The decision to enter a new market — even one close to home — can be fraught with risk. But with 1.25 billion consumers, easier access due to FDI changes and a huge uptick in cell phone usage and e-commerce, the potential opportunity in entering the Indian market is huge.

Before you decide to stake a claim of your own in India, we advise you to do your due diligence, including:

This year marks India’s 70th anniversary of independence and as it continues to climb in stature as a global economy, I’ll keep the country — and its retail sector — on my radar. Stay tuned as we continue to cover the emerging retail market in India, complete with a first-hand account of the shopping district expansion when I visit India later this year.

Anjee continues to be an insatiable collector of all things retail. She’s a student of culture living next door to future shoppers, whose fleeting trends constantly change the retail landscape … driving retailers, landlords and developers crazy!