KOLKATA: Russia’s Sistema JSFC is diversifying into India’s buzzing retail sector with the imminent closure of its telecom services business in the country. The $10-billion Moscow-based conglomerate, through its subsidiary, Concept Group, has floated a 49:51 joint venture with Delhi-based Saamag Group to bring Russia’s popular kids retail brand Acoola to India at an initial $10 million investment to roll out branded stores.
Concept Group, one of Russia’s leading fashion retailers, creates collections and sells women’s clothing, accessories as well as children’s wear through its own retail stores, franchises, and online and wholesale channels.
“We are excited to bring the Acoola retail brand to India. More than 260 Acoola stores are already operational in Russia and the company has drawn up extensive plans to go international, with India being one of the key strategic markets for the brand,” Concept Group CEO Emin Rustamov told ET.
The company had decided to launch the Russian kids retail brand in the country by forming a JV with India’s Saamag Group, which has “extensive experience in commercial construction, retail and e-commerce”, Rustamov said.
The JV plans to launch at least 10 Acoola branded kids retail outlets in India by the end of 2018 across Delhi, Mumbai and Bengaluru. Acoola branded merchandise will include clothing, footwear and accessories for children in the 2-14 age group. The first Acoola branded store is set to be launched on Monday in Noida’s Logix City Centre mall.
The two partners plan to invest $10 million in the first phase of the Acoola branded stores roll-out. This will be followed by additional investments as full scale roll-out progresses, said another executive aware of the matter.
The JV has also taken steps to ramp up the online presence of Acoola merchandise, with plans to make it available on prominent e-commerce platforms such as Myntra.com, Jabong.com and TataCliQ.com, Rustamov said.
Saamag Group chairman Dinesh Pandey said the JV presents “a win-win opportunity” for both the partners as it involves “an international apparel company teaming up with a strong Indian player who understands the domestic retail landscape”.
The real exciting bit, he said, is that India is one of the youngest nations in the world with 29% of its population being in the under-14 years age group, which “really is the sweet spot for the Acoola brand to make its presence felt”.
Sistema JSFC has already entered the startup financing business in India shortly after Anil Ambani-led Reliance Communications (RCom) announced plans to acquire its Indian telecom unit, Sistema Shyam Teleservices Limited (SSTL), which retails CDMA-baased mobile services under the MTS retail brand. The Russian conglomerate’s proprietary venture capital fund, the Sistema Asia Fund, plans to more than double its kitty for Indian ventures to $120 million by early 2018.
The Russian conglomerate’s decision to diversify into India’s retail sector also comes on the heels of the telecom tribunal recently nudging the telecom department to clear the pending RCom-SSTL merger in the next two weeks.