Mentoring the Gen X
A Report on the session conducted for second generation entrepreneurs who joined their family businesses
The Clothing Manufacturers Association of India (CMAI) organised a mentoring session for the Second Generation Entrepreneurs who have joined their family Businesses. B S Nagesh was the Key Speaker at the Session, and gave his valuable insights on trade and markets, on bridging the gap between generations and finding new opportunities in a new world. Mrugaya Chitnis reports. Photographs: Ashish Phatak The first Ivy League Gen X meeting was organised on January 23 by the Clothing Manufacturers Association of India (CMAI) at their Mahalaxmi Office. The seminar, aimed at mentoring the new generation of entrepreneurs and creating a platform for them to talk about adversities and opportunities of trade from their perspective, was attended by 30 Gen X entrepreneurs.
The session was presided over by B S Nagesh, the founder of TRRAIN (Trust for Retailers and Retail Associates of India). An Industry expert, Mr Nagesh is also the Non-executive Vice Chairman of Shoppers Stop and has been with the department store since its inception in 1991.
FROM TRADITION TO TECHNOLOGY
Transition from a traditional set-up to a technologybased one, competition, and understanding the business environment are the challenges faced by the new entrepreneurs. The session commenced with inputs from some Gen X members about challenges and opportunities that they encountered.
Vidhi Dalal from the label B:Kind said, ‘‘Six years back, I started B:Kind, in the western womenswear segment. Our designs are our plus point since they are on par with western brands. This is the right time for the growth of western wear market in India, but there is tough competition from international giants. Creating a brand in India is a tough task and advertising and marketing are some of the biggest challenges we face.’’ Nishant Sainani of Fritzberg spoke of the newer avenues emerging, ‘‘One of the opportunities that has opened up is digital technology, wherein not only the big brands but also the small labels can showcase themselves.
However, we still have a traditional way of running the business. Being from the second generation, I want to change the traditional setup into a digital one and create an omnichannel presence for my brand, so that we are available on all platforms.’’
Chippy Mehta of Creative Group spoke of other issues plauging the new generation, ‘‘Late payments, cost margins and labour in the domestic market are the issues that we face. Our opportunities are in manufacturing for the various labels that are coming in India, and we also look at linking ourselves to online portals and use digital data to market our brands and products.’’
In the freewheeling advisory session that followed, Mr Nagesh addressed the concerns presented and focused on various pointers, such as: Strategy, Transition, International competition, technology and omnichannel. These are elaborated below.
STRATEGY: CREATE YOUR NICHE
Speaking about Strategy, Mr Nagesh emphasised the need to understand today’s consumers, the change in their buying patterns and to create one’s niche in the market. There are a host of opportunities to explore these insights in the form of clothing categories, according to him.
He said, ‘‘Today, the use of multiple categories has increased in the country and this offers a huge opportunity. The western wear market has increased two-and-a-half times the size of the ethnic wear market. There are so many different categories. The womenswear segment itself has so many categories and each can be explored. The key is to create your own niche in any of these categories.’’
He drove the point saying that niche does not mean small, but recognising an opportunity and working on it.
Addressing the topic of brand building, Mr Nagesh said, ‘‘One way to create a brand is through advertising. But even if you put in R100 crores or
R500 crores, there is no guarantee that the brand will work because brand is not only what you see in advertisements. Instead, make a good product and then find a good distribution. Brands get created because of a good product and the relationships created through it.’’
SEASONS AND TRENDS
Speaking about the perception and misconception about trends, Mr Nagesh said, ‘‘Our apparel industry hasn’t cashed in on India-specific seasons. We are still making the Spring/Summer and Autumn/Winter collections according to the western markets. In India the wedding market itself is of R93,000 crores and we have more festivals than other countries. So, don't just emulate the western trends when there is a huge opportunity in the seasons that we are missing.’’
Coming to the market focus, Mr Nagesh advised entrepreneurs to streamline their business and make sales through focused quarters. He said, ‘‘45 per cent of India's apparel market is in five cities and 20 per cent of it is only in Mumbai and Delhi. The Borivali market is bigger than the Jaipur market. Mumbai itself is a market with a value of up to 8-10 thousand crores. Even if you get 0.1 per cent of this chunk, your business will increase by 15-20 per cent.’’
He further stated, ‘‘Don't look at India as a whole; instead, look at territories and decide where your target consumers are located. Create a budget and focus on one or two places. If you think on a national scale, things can go out of hand, because then the cost of capital, cost of collection, travel, etc becomes expensive. Hence, focus only on specific territories.”
They then addressed the topic of transition of business matters from one generation to another. Since all those present were entrepreneurs who had taken the reigns of their family business in their hands and were grappling with the difficulty of turning their traditionally run business into a digitised one, Mr Nagesh offered some advice, saying that they should achieve ‘the golden mean’.
‘‘Some of you told me that the transition from the traditional way of doing business is difficult. Actually it is not the parental transition that is difficult, it is
your transition that is difficult. You think that you are in the business to fulfill a certain custom. But the fact is that nothing is stopping you from creating your own ground. People from both the generations need to sit together and draw an agenda and start working on the points that you both agree on.”
He advised the younger brigade to find their own niche in their traditional business and unbridle themselves to explore it.
Speaking about the concern that the young entrepreneurs expressed over the tough and intimidating competition from international brands, Mr Nagesh said that we need to observe their strategy and learn from them, rather than being afraid of them. He said, “They have entered our market with a sharp focus. They are willing to put in more money and resources to bring in quality. That's what we have to learn. We need to invest in talent. The mantra is to follow the consumer and give him an experience that he will not find anywhere else. Competition is not in the product, competition is in the experience, and in the service through which, if you are able to give better than others, you can bag the customer.”
Expressing his views about the presence of Omni Channel, Mr Nagesh said that it is necessary to use this mode of operation in a selective and better way for business.
Dismissing the apprehensions of Gen X, Mr Nagesh said, “Nowhere in the world has e-commerce taken away 50 per cent of the market. In all statistics, from big players to small, and also in the international statistics, the conversions are 10 per cent to 15 per cent. The Indian womenswear market is worth R40,000 crores, and the omnichannel is affecting no more than 1.5 per cent of it. The reason we are lamenting is because we all are eying the same consumer, in the same segment, in the same market, on the same street. Today the consumer is omni, so you have no option, but to also be omni. The bigger opportunity for us is if you find a big investor, or some foreign company who is willing to put in money to help you to grow your business, you should use these platforms.”
While fielding answers to the questions raised by the young entrepreneurs, Mr Nagesh cited examples of various successful businesses and brands to illustrate his solutions.
Speaking about futuristic trends he said, “In my opinion, the next five years are going to be real glorious years for SMEs. About MBOs, I feel that the high street is going to come back, but in a very different way. The 800 sq ft stores are going to become 2000 sq ft stores. Malls will grow at a certain rate, but there won’t be too many coming up. The Online market will grow very fast, but you have to decide how you will you ride the online wave to reach your target.”
Stating the importance of compliance in today’s times, Mr Nagesh said, “The future is all about compliance and you can’t run the business like the previous generations. With GST, the government will know your basic cost. In the next 3-5 years the GST regime will be very strong. So, young people need to build businesses with absolute transparency.”
Mr Nagesh recommended that the Gen X should pool their resources to invest in a consumer-based research project that will benefit all of them. He also advised seeking the guidance of Industry seniors periodically to get a better insight on things, and also not to repeat any mistakes they have observed.
The session ended with a Vote of Thanks, presented by Mr Rahul Mehta, who expressed gratitude to B S Nagesh for his valuable guidance and reiterated his words: “Niche does not mean small; niche means working with a sharper objective.”
Naveen Sainani, Head of the IVY League segment, expressed his satisfaction at the success of the first Gen X session and promised to arrange more such fruitful interactions.