Ex­plor­ing new mar­kets includes on­line... Don’t miss the bus!

Don’t miss the bus!

Apparel Online - - Front Page -

Sur­pass­ing many pre­dic­tions, Ama­zon is poised to up­root Wal­mart as the No. 1 re­tailer in the US, cre­at­ing a buzz among ex­porters sup­ply­ing to the US.

This e-com­merce gi­ant is al­ready top spot among other ap­parel re­tail­ers, like Tar­get, Kohl’s and TJ Maxx. Fol­low­ing the lead, many brands are look­ing to lever­age the on­line/dig­i­tal ad­van­tage. Af­ter re­port­ing a mas­sive 57 per cent in­crease in its on­line sales at 1.5 bil­lion Eu­ros in 2017, Ger­many­based sportswear com­pany Adi­das is con­sid­er­ing to sell more prod­ucts through e-stores. The story is the same for many brands. Sell­ing plat­forms may be dif­fer­ent, but the medium is the same. In­dia is also pick­ing up the trend quickly.

A re­cent study by Face­book and Boston Con­sult­ing Group (BCG) claims that Indian on­line fash­ion mar­ket which is cur­rently around US $ 4 bil­lion, will be worth around US $ 12-14 bil­lion by 2020. In the US alone, re­tail e-com­merce rev­enues from ap­parel and ac­ces­sories sales amounted to US $ 72.13 bil­lion in 2016 and are pro­jected to in­crease to US $ 116.3 bil­lion by 2021. This rep­re­sents a huge op­por­tu­nity for play­ers in the seg­ment, in­clud­ing gar­ment ex­porters, both in the na­tional and in­ter­na­tional mar­ket. So, are the Indian ex­porters ready to en­cash this mas­sively grow­ing op­por­tu­nity? Ap­parel On­line ex­plored how the ex­porters are do­ing in this seg­ment and what they need to do to en­sure that they do not miss this bus. A ris­ing num­ber of gar­ment man­u­fac­tur­ers, be it medi­um­level Indian ex­porters or man­u­fac­tur­ers do­ing do­mes­tic as well as ex­ports, are do­ing rea­son­able amount of on­line busi­ness and most have started fo­cus­ing more on this seg­ment in last 3-4 years. For most, the re­sponse so far has been sat­is­fac­tory. Rea­sons for en­try into on­line busi­ness vary from com­pany to com­pany, as there is not much growth in ex­ports.

On­line is def­i­nitely a grow­ing seg­ment, and many ex­porters are al­ready do­ing busi­ness in do­mes­tic mar­ket (off­line). These are among the most com­mon rea­sons for get­ting into e-re­tail. Ex­porters are work­ing in both ways with on­line plat­forms with their own brand/la­bel or do­ing la­bels of these plat­forms as a con­tract man­u­fac­turer. Some have also cre­ated their own web sites to sell their own la­bels.

All the op­tions have their own ben­e­fits and neg­a­tive as­pects. Ex­perts be­lieve that hav­ing proper bal­ance in all seg­ments is the best growth strat­egy.

Work­ing for an es­tab­lished plat­form’s la­bel is com­par­a­tively easy and more preva­lent with the ex­porters as this sys­tem is more or less near to their ex­ist­ing sys­tem of ex­ports. In this sys­tem, for ex­porters, there is no ‘headache’ of ‘re­turns’ as in fash­ion prod­uct, av­er­age re­turn is nearly 30 per cent. Only is­sue is the very small or­der size which is nearly 200 pieces per colour or lit­tle more,

“The Global Sell­ing Pro­gram opened a flood­gate of op­por­tu­ni­ties for Indian man­u­fac­tur­ers and SMEs to de­sign and man­u­fac­ture prod­ucts for global mar­ket­places and get ac­cess to mil­lions of Ama­zon cus­tomers, and thus build global brands. On the tex­tile side, we have great di­ver­sity – ap­parel from Tirupur, printed bed­sheets made in San­ganer... We be­lieve Ama­zon Global Sell­ing will trans­form Indian prod­ucts’ ex­ports as it en­ables more and more ex­porters to ven­ture into in­ter­na­tional mar­kets with ease and con­ve­nience to un­ravel the op­por­tu­nity that lies ahead.”

– Amit Agar­wal Se­nior VP and Coun­try Head, Ama­zon In­dia

some plat­forms pay monthly. Is­sue of pay­ment in the case of in­di­vid­ual brands is lit­tle com­pli­cated to man­age as ‘re­turns’ come in even af­ter a month and de­spite hav­ing sys­tems in place, it is a lit­tle chal­leng­ing.

Some con­cerns…

Some of the man­u­fac­tur­ers are of the opin­ion that sell­ing own brands through these por­tals is not dif­fi­cult if some­one is hav­ing strong con­trol over PD, proper qual­ity, rea­son­able price and knowhow of so­cial me­dia and dig­i­tal mar­ket­ing. With good de­sign, per­fect qual­ity and proper de­liv­ery, chances of re­turn re­main less. If the prod­uct is of good qual­ity, and has proper fit­ting, and yet de­spite all this it is re­turned, then there are enough chances that it will be bought by an­other cus­tomer. “Re­turn is not a big is­sue as we take care of all as­pects be­fore dis­patch. What­ever re­turns are there, are be­ing re­duced, now,” says Satish Bansal, MD, Sriyansh Knit­ters, Lud­hi­ana, hav­ing his brand ‘TSAVO’. But Satish has a dif­fer­ent is­sue, as he mainly of­fers win­ter­wear, so vis­i­bil­ity is less.

“We are do­ing busi­ness through Flip­kart, Ama­zon and Snapdeal from last 2-3 years but still or­der quan­ti­ties have not picked up. Over­all process is very time­con­sum­ing. We are try­ing to grow but so far this seg­ment is neg­li­gi­ble for us,” he added. But few ex­porters do­ing their own brand/la­bel are of the view that it is very chal­leng­ing, as apart from courier charges, cost of fin­ish­ing the re­turned gar­ment is an­other is­sue. Some­times, the re­turned gar­ment is dam­aged also.

Suc­cess­ful ven­tures…

De­spite all chal­lenges, some good ex­am­ples are also there, like women cloth­ing brand ‘Eves Pret A Porter’. Ankit Ag­gar­wal, Di­rec­tor, Eves Fash­ion, Delhi who joined his fam­ily busi­ness of gar­ment ex­ports is now suc­cess­fully run­ning his own ini­tia­tive Eves Pret A Porter, avail­able on all lead­ing plat­forms and do­ing rea­son­ably well. It can be a good ex­am­ple of an ex­porter sell­ing his brand on­line. “With­out much pro­mo­tion, we are sell­ing 300

pieces ev­ery day. As this busi­ness is all about long-term plan­ning and there is enough scope, we are sure to grow fur­ther,” said a con­fi­dent Ankit. He fur­ther added that one has to have a dif­fer­ent and ded­i­cated team for this seg­ment and needs to be pa­tient due to the na­ture of this busi­ness. “Your stock may be clear in one month or it may take one year also; so hav­ing a long-term vi­sion is a must,” he added.

Ankit is also of the view that if some­one is hav­ing av­er­age sale of 1,000 pieces daily, in that case it is worth to do the busi­ness with dif­fer­ent in­fra­struc­ture and with full re­sources, oth­er­wise func­tion­ing with the ex­ist­ing in­fra­struc­ture is the best op­tion. Also, hav­ing a bal­ance within on­line busi­ness, be it own brand, or do­ing for other la­bels is also a good op­tion to be in touch with the mar­ket. Work­ing with Ama­zon in the global sphere, Espresso In­ter­na­tional, Tirupur ful­filled its dream of build­ing a global brand. Till 2012, the com­pany was do­ing ex­ports and busi­ness was fine. How­ever, in 2012 the dye­ing is­sue re­lated to pol­lu­tion, re­sulted in many fac­to­ries shut­ting down in Tirupur, and which proved to be a turn­ing point for the com­pany. “The break of one year forced me to re­think my busi­ness strat­egy and that’s when I thought of es­tab­lish­ing my own T-shirts brand and go on­line. I had al­ready done busi­ness off­line and knew the chal­lenges. The on­line world how­ever, was very dif­fer­ent. There was ease of do­ing busi­ness and one could start im­me­di­ately. That’s how my brand called Espresso was born and I signed up with Ama­zon.com in 2015,” shared V G Si­varaj, Espresso In­ter­na­tional. Now that the US busi­ness is well es­tab­lished, Si­varaj is mo­ti­vated to ex­pand busi­ness to UK clients as well. “In 2017, we have reached the point of around 100 pieces a day, with al­most a turnover of around US $ 800-1,000 a day.

That’s huge for me,” he added.

When the wave of glob­al­iza­tion swept In­dia in 2005, Sathesh Nal­lathambi Cal­lista, Na­makkal in­vested a lot in spin­ning and weav­ing, as a re­sult both pro­duc­tiv­ity and qual­ity in­creased and all good ex­porters were sourc­ing from them. But Sathesh wanted to con­vert the fab­ric into ready­made prod­ucts and ship these ar­ti­cles for ex­ports, how­ever the sit­u­a­tion of phys­i­cal stores was bad, so he took the on­line plunge in 2017. “I was aware that in the last five years in Europe, UK and US, many of the phys­i­cal stores were closed down, suf­fer­ing from losses. So I joined Ama­zon in 2017 with our brand, Cal­lista, in USA, and started with our first ship­ment that landed in Jan­uary 2017. From bed­sheets to other ready­made prod­ucts, we are ex­port­ing now glob­ally.

When we be­gan, we set an an­nual tar­get of US $ 1 mil­lion and have al­ready passed more than 50% of the tar­get. We are very con­fi­dent that we will sur­pass this tar­get within this fi­nan­cial year. This has also given us mo­ti­va­tion to grow more with Ama­zon in var­i­ous ge­o­graph­i­cal lo­ca­tions like UK, Europe,

Aus­tralia, and Ja­pan,” con­cluded an up­beat Sathesh.

“Cur­rently the do­mes­tic busi­ness is 30 per cent of our to­tal, whereas the on­line busi­ness is on ex­per­i­men­tal mode. Since Indian mar­ket is chang­ing and is quite dy­namic too, the buy­ing pat­tern and our strat­egy ac­cord­ingly are also chang­ing… Hope­fully we will grow in on­line seg­ment also.”

– Ni­raj Ku­mar Pu­galia, Sil­ver Ap­par­els, Noida

Ankit Ag­gar­wal (R), Di­rec­tor, Eves Fash­ion, Delhi and Founder, Eves Pret A Porter, with his fa­ther Sushil Ku­mar Ag­gar­wal

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.