American Eagle Outfitters announced on Wednesday a multi-year license agreement with the Aditya Birla Group, a leading Indian conglomerate with an extensive retail portfolio, as well as strong digital and omni-channel capabilities, according to a press release.
The tie-up marks AEO’s first entry into India; its first stores will open in Mumbai and Delhi next spring, according to the release.
Mumbai-based Aditya Birla Group’s retail operations include 900 stores and 6,000 "additional points of sale," the company said.
India is the top developing country for retail investment, on the strength of a growing economy and middle class, and a favorable regulatory environment, according to A.T. Kearney's Global Retail Development Index. China showed up at number two, a sign of that country’s maturing, if still vast and healthy, economy.
Foreign retailers face a slew of complex and arcane regulations in India that seek to protect home-grown and brick-and-mortar businesses — and the country's infrastructure isn't always up to the demands of e-commerce, especially away from the cities. Still, the prevalence of English and a young, rising, mobile-first middle class is making for an ideal market.
"India’s rapidly developing and vibrant economy, anchored by the world’s largest youth population, provides an exciting growth opportunity for our brands, expanding our global reach," Andrew McLean, AEO executive vice president of global commercial operations, said in a statement. "Aditya Birla brings deep market experience and extensive retail capabilities, giving us a strong platform to deliver our leading AE jeans collections and casual American style to India’s growing market."
Several other retailers have also taken note. Amazon has been operating and selling in India for many years and has recently began making headway against Indian e-commerce market leader Flipkart. Armani Exchange, Cole Haan, Heatwave, Muji, Massimo Dutti, Kate Spade and others brands have also launched there.
H&M also has plans to open several stores there, and sportswear brands Puma and Adidas are looking for government approval to operate fully-owned retail stores and online portals. Ikea, the world’s largest furniture retailer, also plans to invest $1.56 billion to set up 25 stores nationwide, and Hudson’s Bay Co. is establishing offices in Bangalore.