M&S says India more significant market than China

By Rina Chandran

MUMBAI, April 21 (Reuters) - British retailer Marks and Spencer (M&S) (MKS.L: Quote, Profile, Research) aims to step up the pace in India with its new joint venture with Reliance Retail and says it expects the fast-growing market to be more significant than China.

M&S, which expects its international business to make up 15-20 percent of total revenues in the next five years, said on Friday it would take 51 percent -- the maximum permissible by Indian law -- in a venture with Reliance Retail, a subsidiary of Reliance Industries Ltd (RELI.BO: Quote, Profile, Research).

Marks & Spencer Reliance India Pvt Ltd will open at least 50 new stores in India over five years to sell apparel and homeware, with an initial investment of up to 29 million pounds ($58 million).

The UK retailer's previous franchise partner Planet Retail, will continue to operate the 14 existing franchise M&S stores.

"When we looked at the market and the scale of opportunity here, we realised a joint venture was the way to do it, as it gave us a lot more involvement in the business," Mark Ashman, chief executive of M&S Reliance India, said at the weekend.

M&S last month announced a franchise arrangement to expand into the Middle East and is setting up a wholly-owned store in Shanghai. But India, despite its controls, will be significant.

"India, I think, is more important than China because of the scale of the market and because the M&S brand is already well known here," Ashman told Reuters by telephone.

TRENDY TO BE IN INDIA