Industry Panorama & Strategies
With change being the only constant, Tias Chakraborty analyses the evolution of the Indian fashion apparel landscape and the challenges being posed by the increased presence of foreign players.
W ith more disposable income in the hands of the middle class and increased exposure to Western trends through multiple media, the Indian apparel sector has witnessed an incredible transformation in the last decade. And foreign brands have definitely taken a liking to this evolution of the apparel industry. According to consulting firm, Third Eyesight’s research, there has been a phenomenal growth in the number of international brands entering the Indian market in the last decade and it is evident that we have arrived at the foothills of a major wave.
WINDS OF CHANGE
With more and more international brands taking interest in the Indian market, domestic players in the apparel manufacturing and fashion industry have higher standards to maintain. Interestingly, this inflow of international products has worked well for the Indian players as it has opened up opportunities for more collaborations, design exchanges and distribution. International brands have been able to leverage the retail channels of the
Indian companies, ensuring a presence in their target markets. For example, companies such as Adidas, FILA, Nike and Puma have excellent penetration in the market as a result of their strategic tie-ups with Indian retailers. Modern trade in India has also grown in this period and has been instrumental in helping some of these brands enter the Indian market. Shoppers Stop has been a key Indian player that has brought in several international brands to the Indian shelves. Similarly, increased international travel has caused Indians to become aware of a wide range of global apparel brands. In the last decade, we have witnessed the entry of brands such as S Oliver, Marks and Spencer, Aldo and several others enter and thrive in the market. Concurrently, Indian brands have also entered the premium segment and received a mixed response from the market.
THE COMPETITIVE LANDSCAPE
Theoretically, local brands in India mostly cater to the Indian middle class. This is not only because this category forms the largest consumer base but also because manufacturers and sellers understand the quality and price expectations of this segment. For international players, this category might often be difficult to hook primarily because of the value-formoney approach of the buyers. When one factors in the cost of logistics and the advanced machinery used by premium brands, it becomes evident that this category will take a long time to penetrate the middle class Indian base with its pricing limitations.
INTERNATIONAL PREMIUM BRANDS ARE FINDING IT TOUGH TO PENETRATE THE INDIAN MIDDLE CLASS SEGMENT BECAUSE OF THEIR VALUE-FOR-MONEY
Another interesting factor is the influence of media on local preferences. A significant chunk of the Indian population is strongly influenced by the film and television industry. These influences may not necessarily be in line with international fashion trends that players such as Abercrombie and Fitch, Aéropostale or Givenchy might offer. This gap is well leveraged by local brands who ensure that their latest collection keeps in mind the five biggest Bollywood super hits of the year. Interestingly though, some players have found incredible success in the Indian retail landscape in spite of making a gradual shift from India-focused collections to launching collections as per international fashion trends. A major example of such a risk taker is Benetton. Attractive discounts and a great retail presence across metros has ensured that Benetton has a large slice of the middle and upper middle class buyers. The Indian brand Zodiac also witnessed this rising demand for global fashion among Indian consumers and launched its Z3 range in 2008.
With challenges now being posed in the form of international players, Indian retailers will need to come up with more creative and unique strategies. And today the creativity needs to not just reflect in the clothes one makes but also in the marketing strategy of the brand. With the help of Facebook pages, ads, SEO, interactive/ responsive websites and innovative retail infrastructure investments such as store-in-stores and teasers, companies can make an everlasting impression on the minds of the buyers. Today, there are several ways where the role of the middlemen in the apparel trade can be cut out and products can be directly sourced from the manufacturer. This makes it easier for new age retailers to tap into traditional markets where handlooms and embroidery still exist. Here are four simple strategies that Indian brands can follow to outdo their global counterparts in the Indian apparel landscape: Loyalty programmes: While large format retailers have successfully implemented these programmes, Indian brands are yet to utilise the massive potential of this concept. From discounts to customised special offers, loyalty programmes can help build brand loyalty significantly.
Local appeal: For an Indian brand, it is far easier to understand local preferences and tweak the products accordingly. It is also essential to factor in credit history of distributors, retailers and service providers. Distinction: The apparel sector faces intense competition and the only way to stand out is to offer something unique at the core. If you are selling organic cotton, ensure that your marketing highlights where it comes from and how. With digital marketing taking over, it is easy to create an international appeal and lose the local flavour of the product; this is where local/ Indian brands need to know how to strike the right balance.
THE APPAREL SECTOR FACES INTENSE COMPETITION AND THE ONLY WAY TO STAND OUT IS TO OFFER SOMETHING UNIQUE AT THE CORE.
Going digital: Internet penetration has made India a hub for e-commerce. Brands leveraging this incredible network of buyers can easily get an edge over their international counterparts if they get their pricing right. In spite of the roadblocks that have appeared in the last few years, the apparel sector in India is on an upward curve. With technology as its wingman, there might be no looking back.