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11-May-2017

US apparel chain GAP will manufacture and sell in Indian market to counter mounting competition from its European rivals Zara and Hennes & Mauritz (H&M).

“We had a very good start. But there was a new duty introduced by the government in 2016 on imported products, which increased the cost model of GAP,” J Suresh, MD of Arvind Lifestyle Brands and Arvind Retail, which runs JVs or franchisees of top global brands including, GAP, said.

He said. “Going forward, we will correct prices by 10 to 15 per cent because we have got approvals to manufacture in India and therefore won’t be required to pay import duties.” Earlier, although India has been a strong sourcing hub for GAP for its global markets, it did not have the necessary approvals to sell the same products here.

With reference to GAP’s partnership with Amazon, Suresh said the move is likely to increase contribution from online sales (negligible now) to 10 per cent immediately, and to 15 to 20 per cent 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.

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