Gap to manufacture in India, expects increase in online sales

By

Maverick Martins

Published
May 11, 2017

US apparel chain Gap is planning to manufacture its products in India and sell locally to take on European rivals Zara and Hennes & Mauritz (H&M). Arvind Lifestyle which owns the rights for Gap in India is also expecting an increase in online sales following its partnership with Amazon, according to a report in the Times of India.

 
“We had a very good start. But there was a new duty introduced by government in 2016 on imported products, which increased the cost model of GAP,” said J Suresh, MD and CEO at Arvind Lifestyle Brands and Arvind Retail, which runs JVs or franchisees of top global brands including, Gant, Gap and Ed Hardy and Aeropostale.
 
“When H&M came, they came with low prices. Zara followed suit and cut prices too,” he said. “Going forward, we will correct prices by 10-15% because we have got approvals to manufacture in India and therefore won’t be required to pay import duties.”

On Gap’s partnership with Amazon, Suresh said the move is likely to increase contribution from online sales (negligible now) to 10% immediately and to 15-20% over a period of five years. Since both Zara and H&M don’t sell online here at present, the move is expected to give GAP the first-mover advantage in the country’s fast-growing e-commerce space.

At present, Gap operates 11 stores across the country and it plans to open four more by the year-end.