PAVING THE WAY FOR­WARD

Apparel - - 62ND NGF SPECIAL -

HOW WERE THE TWO DAYS OF THE 62ND NGF? I think it was slightly bet­ter than what we had an­tic­i­pated. Be­cause of the cur­rent mar­ket con­di­tions, we were def­i­nitely ex­pect­ing a low turn-out, but, for­tu­nately, by around af­ter­noon to­day (the se­cond day) we have ex­ceeded the num­ber of vis­i­tors of last Jan­uary. So, this is a pos­i­tive sign. As I was walk­ing around and ob­serv­ing, the par­tic­i­pants too, seem to be happy and busy writ­ing or­ders. So, I think it is a good sign. The NGFs play the role of be­ing ‘game chang­ers’ when the mar­ket con­di­tions are not so pos­i­tive, not so en­cour­ag­ing. The glam­our of the Fair, the over­all am­bi­ence, and the mood which pre­vails, gen­er­ally get deal­ers to place more or­ders. I think it is a pos­i­tive re­sponse. From the per­spec­tive of the brands which do par­tic­i­pate in the EOSS, I think it is in­evitable. Un­like most of the MBO sales where re­tail­ers buy on an out­right ba­sis, the large for­mat stores typ­i­cally deal on a sale or re­turn ba­sis. At the end of the sea­son, goods that are not sold, are left in the brand’s ac­count. What do you do with those stocks? You have to get rid of them. So, you have to have a dis­count at the end of the sea­son to sell the stocks. I don’t blame the brands for par­tic­i­pat­ing or hav­ing the EOSS. Where the dis­con­nect comes in, is per­haps the length of the dis­counts that are be­ing pro­vided and the pe­riod for which the dis­counts are pro­vided. The more dis­count­ing there is, the more it en­cour­ages the con­sumers not to buy at full prices. In the long run, the over­dose of the EOSS will be harm­ful. From the MBOs’ per­spec­tive, I think, the av­er­age MBO will def­i­nitely find it dif­fi­cult to per­suade the cus­tomer to buy at full prices, when at the next door, it is be­ing sold at a 50 per cent dis­count. Though I think that the MBOs do de­velop their own Mr Rahul Me­hta, Pres­i­dent, CMAI, speaks to Kashmira Mirza on a wide range of Top­ics, ex­press­ing his Views on the 62nd NGF, the up­com­ing Bud­get, EOSS, E-Com­merce, new Brands from Cre­ative Life­styles Ltd., and what he Fore­sees for the Ap­parel In­dus­try. Read on... Pho­to­graph: Ra­jesh Terekar. WHAT DO YOU HAVE TO SAY ABOUT THE OR­GAN­IS­ING AND PLAN­NING OF THIS FAIR? The or­gan­is­ing and plan­ning, as usual, has been ex­cep­tional. What par­tic­u­larly pleased me was the ef­fort on the part of the Fair Sub-Com­mit­tee and the re­sponse to the blood do­na­tion drive. Over 200250 peo­ple have do­nated blood, which, for a start, is very en­cour­ag­ing. It shows that even hard­ened busi­ness­men have so­cial com­mit­ments. It was a very good idea and I hope they con­tinue this the next time also. It is an ex­cel­lent idea which cropped up when we were dis­cussing ideas at a meet­ing and some­body sug­gested, ‘Why not blood do­na­tion?’ We went ahead with it. The re­sponse has been ex­cel­lent. THERE WERE MIXED RE­SPONSES WHEN WE ASKED PEO­PLE ON THE GROUND ABOUT EOSS. WHAT WOULD YOU HAVE TO SAY ABOUT THE SAME, IN THE CUR­RENT SCE­NARIO?

spe­cial re­la­tion­ships with clients and client loy­alty is in­deed a re­al­ity. They may not have the so­phis­ti­cated sys­tems of CRM, etc.; they might not use the same jar­gon. But, I think, that the kind of re­la­tion­ship that an MBO has with its cus­tomer is far stronger than what a cus­tomer has with a Large For­mat Store. They can def­i­nitely sus­tain them­selves. IS THE E-COM­MERCE WAVE HARM­ING THE AP­PAREL IN­DUS­TRY? WHAT ARE YOUR EX­PEC­TA­TIONS FROM THIS BUD­GET? We have a one-point agenda—GST. Keep the tex­tile in­dus­try in the low­est pos­si­ble slab be­cause if the ‘neu­tral rate’ of the in­dus­try is about eight per cent, any­thing above that will in­crease the prices, cre­ate trou­ble and will def­i­nitely en­cour­age the fringe to move from the or­gan­ised sec­tor to the un­or­gan­ised sec­tor. We are fight­ing very hard to per­suade the Govt. to make sure they put us in the low­est pos­si­ble slab. HOW IS YOUR NEW BRAND, MYS­TÈRE PARIS, WHICH WAS LAUNCHED IN THE LAST NGF, DO­ING? It is do­ing very well. We have not cho­sen the route of heavy ad­ver­tise­ments and pro­mo­tions and we are go­ing about it slowly. It will take time. The prod­uct is good, we have got a very good dis­tribut­ing sys­tem, the right kind of re­tail­ers, and the prod­uct cat­e­gory is a very in­ter­est­ing one, there are not many play­ers in this par­tic­u­lar cat­e­gory, it will def­i­nitely do well in the long run. CAN YOU TELL US SOME­THING ABOUT O2XY­GEN? This brand was launched by us just a month or so ago. Es­sen­tially, to ad­dress the prob­lem I men­tioned ear­lier about the MBOs sell­ing prod­ucts at full prices and EBOs and Large For­mat Stores sell­ing at dis­counted rates in the EOSS. This is one brand that we have launched which is go­ing to be avail­able ex­clu­sively only in MBOs. We are not go­ing to have any EBOs and we are not go­ing to sell it in Large For­mat Stores. It will be a pure MBO-brand and this is where we be­lieve that our prices can be sharper. The prod­uct is right, which is the most im­por­tant fac­tor. I be­lieve that the MBOs’ in­ter­est in the prod­uct and the brand will be much more be­cause they will not be fac­ing any com­pe­ti­tion from the EBOs or Large For­mat Stores. I think it is an in­ter­est­ing cat­e­gory. I am ea­gerly look­ing for­ward to its progress. I think it is an amaz­ing cam­paign, an amaz­ing thought. My re­gret with that cam­paign is that it is more looked upon as a cam­paign aimed at bring­ing higher in­vest­ment into the coun­try rather than in­creas­ing the em­ploy­ment op­por­tu­ni­ties. The Govt. has to pay more at­ten­tion to in­dus­tries which gen­er­ate em­ploy­ment. We are not a labour-scarce so­ci­ety, un­like the West. Our need, as much as that of eco­nomic de­vel­op­ment, is the de­vel­op­ment of the poor and marginalised. I think enough at­ten­tion has not been paid to the Ap­parel In­dus­try which is the high­est em­ployer of the work­force, af­ter the Agri­cul­ture In­dus­try. How­ever, I have a feel­ing that with our con­stant bad­ger­ing and dis­cus­sions with Govt. of­fi­cials at var­i­ous lev­els, from the sig­nals that I am get­ting, there is some re­al­i­sa­tion of this and you will see that in the com­ing months, there will be more fo­cus on how to in­clude the Ap­parel In­dus­try in the whole ‘Make in In­dia’ cam­paign. WHAT DO YOU FORE­SEE FOR THE AP­PAREL IN­DUS­TRY FOR THIS YEAR? As I said ear­lier, I don’t think it will be a gamechang­ing year. I don’t ex­pect it to be a boom year of the in­dus­try nor do I share the pes­simism of peo­ple who feel that it will be a ter­ri­ble year for the in­dus­try. I THERE WAS EN­THU­SI­ASM ABOUT ‘MAKE IN IN­DIA’; DO YOU THINK THE AP­PAREL IN­DUS­TRY HAS BEEN REP­RE­SENTED ENOUGH IN THE CAM­PAIGN? Yes and no. Again, my views are very clear. You can­not wish away E-Com­merce. It is here to stay. Per­haps, what has hap­pened is that the E-Com­merce com­pa­nies in In­dia fo­cus only on the one ad­van­tage of E-Com­merce—lower prices. E-Com­merce has many ad­van­tages: ease of pur­chases, con­ve­nience of pur­chases, and also, E-Com­merce sites do not have to buy and phys­i­cally stock goods, ev­ery­thing is avail­able vir­tu­ally. There is a lot of va­ri­ety in terms of styles, sizes and de­signs. In In­dia, how­ever, th­ese two sig­nif­i­cant ad­van­tages are not be­ing pushed. The fo­cus is on the pric­ing ad­van­tage, that it is more eco­nom­i­cal be­cause you don’t have the ex­penses of phys­i­cal retail space, of plan­ning in­ven­to­ries. Th­ese fac­tors put to­gether, E-Com­merce will def­i­nitely tend to be cheaper than off­line. The model that they have se­lected now, of very deep dis­count­ing and the in­cred­i­bly high ra­tio of ad­ver­tis­ing to sales, is not a sus­tain­able model. They can­not sus­tain such losses, and at some point or the other, the ‘sins’ will catch up with them. I do not feel that the kind of 70-80 per cent dis­counts they of­fer to­day can be sus­tained for a very long time. They will have to change track. A busi­ness has to, at some point, make prof­its. The le­gal­ity of the model is an­other is­sue which should be left for the ex­perts to de­bate. think it will be a de­cent year. My own ex­pec­ta­tion is that the do­mes­tic mar­ket will grow be­tween eight to 10 per cent. I am not too wor­ried.

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