In­valu­able In­sights on Value Retail

Apparel - - Contents -

A Re­port on the IVY league talk by Mr Rakesh Biyani on the Fu­ture of Value Retail in In­dia

The 17th IVY League Meet­ing of the CMAI proved to be an In­valu­able Ses­sion as Rakesh Biyani, Joint Man­ag­ing Di­rec­tor - Fu­ture Retail Lim­ited and Vice Pres­i­dent, CMAI, spoke at length about the Fu­ture of Value Retail in In­dia, and his own Retail Chain. Mru­gaya Chit­nis re­ports. Pho­to­graphs: Ashish Phatak The 17th IVY League meet­ing was held on 19th Fe­bru­ary, 2018 at The Orchid Ho­tel in Mum­bai. Rakesh Biyani, Joint Man­ag­ing Di­rec­tor - Fu­ture Retail Lim­ited and Vice Pres­i­dent of CMAI graced the podium as the key speaker for the topic of the evening - ‘Is Value Retail the fu­ture of retail in In­dia?’. Also present were em­i­nent mem­bers of the Cloth­ing Man­u­fac­tur­ers As­so­ci­a­tion of In­dia, and the cloth­ing fra­ter­nity. There was also a sig­nif­i­cant pres­ence of gen X mem­bers, which con­sists of the youth who have en­tered their fam­ily gar­ment busi­ness.

An ex­change of pleas­antries and in­for­mal dis­course be­tween the mem­bers and the dig­ni­taries over snacks and bev­er­ages set the mood for the evening. The ses­sion be­gan with Naveen Sainani, head of IVY League, in­tro­duc­ing Rakesh Biyani rightly as “The man who needs no in­tro­duc­tion.” Fol­low­ing this, Biyani took to the podium to speak about the topic of the evening ‘Is Value Retail the fu­ture of retail in In­dia?’

IN­DIA – A POSTIVE GROUND FOR VALUE RETAIL

Af­firm­ing Value Retail to be the fu­ture, Rakesh Biyani said,“Con­sumers all over the world, no mat­ter where they shop, seek af­ford­able prices. Value re­tail­ing is more rel­e­vant in In­dia be­cause we don’t have a rich econ­omy. This may be the present sit­u­a­tion, but a lot is chang­ing in In­dia at the macro level. In­dia is be­com­ing more af­flu­ent. The mid­dle class is be­com­ing more af­flu­ent. There are 161 mil­lion house­holds and 40-50 crore peo­ple who are from the mid­dle class. They are peo­ple who are as­pir­ing for good prod­ucts and form the largest con­sumer base to­day. In the next 10-12 years, we will have the sin­gle largest mid­dle class pop­u­la­tion in the world. And that is the op­por­tu­nity that is in front of us.”

BE­YOND PER CAPITA MARK Giv­ing ex­am­ples of coun­tries like China, Rus­sia, Brazil, South Korea and Sin­ga­pore, that crossed the $2000 per capita mark in the past, Biyani said, “What hap­pens to the mar­ket in a decade af­ter a coun­try passes this mark is that there is a growth in the retail, es­pe­cially ap­parel retail. Ac­cord­ingly, things will change once In­dia too crosses the $2000 mark and grows like China. Hence, the over­all growth that is likely to hap­pen in the gar­ment busi­ness is sig­nif­i­cantly high.”

THE RETAIL BUSI­NESS

Speak­ing about the cur­rent and fu­tur­is­tic busi­ness of retail he said,“Cur­rently, or­gan­ised retail is about 70 bil­lion dol­lars and it’s grow­ing at about 20 per cent per an­num. Of this, 46 bil­lion dol­lars is the con­sump­tion of retail in cloth­ing in In­dia. In fu­ture, ex­clud­ing ex­ports, the do­mes­tic in­dus­try is go­ing to grow up to 115 bil­lion dol­lars. So as I see, the con­sump­tion of ap­parel is cer­tainly go­ing to grow.”

He added that, “In In­dia, big or­gan­ised re­tail­ers don't have much scope to grow fur­ther, so the larger share of mar­ket is in the hands of the un­or­gan­ised sec­tor. Num­bers say that 98 per cent of the mar­ket is go­ing to be af­ford­able fash­ion mar­ket, of which 46 per cent will be ready­made ap­par­els. Also, the ‘mom & pop’ stores are go­ing to sur­vive."

Biyani also said that though the on­line por­tals are mak­ing strides, in­stead of be­ing in­tim­i­dated by the on­line mar­ket, our fo­cused ap­proach in busi­ness will take us ahead.

ABOUT FBB

Speak­ing from his own ex­pe­ri­ences with the Fu­ture Retail lim­ited’s fash­ion busi­ness, Biyani said,“We run FBB (Fash­ion at Big Bazaar), Cen­tral and Brand Fac­tory, which to­gether make our fash­ion busi­ness. Our mantra is to clothe the peo­ple. Great fash­ion, great prod­ucts, and great prices are our sig­na­ture strate­gies.” To­day, FBB has 300 stores, a pres­ence in 121 cities, 20 lakh sq ft of retail space, and a rev­enue of about 500 crore ru­pees a month.

Ex­plain­ing FBB’s strat­egy, Biyani said,“We have pre­ferred to go on a multi-brand strat­egy route, rather than build­ing ev­ery­thing to­gether as a sin­gle brand. We have var­i­ous brands for dif­fer­ent cat­e­gories in men’s, women and kids’ ap­parel in our stores. And while we are nur­tur­ing th­ese brands, they have be­come much larger. We don't use the name FBB on any prod­uct.”

“Also, in the stores we have de­signed more trial rooms, be­cause un­less there are more trial rooms, peo­ple are not go­ing to be able to try more clothes. We have also cre­ated more cash coun­ters for the con­ve­nience of cus­tomers. The stock which is vis­i­ble sells faster, so you have to strate­gise your dis­play of stocks and iden­tify what stock sells at which spot in a store.”

GROW­ING BUSI­NESS

Biyani then made a pre­sen­ta­tion of FBB’s con­cept to look be­yond cat­e­gories. He showed how they have set them­selves on higher sales tar­gets by work­ing on their price points that give value to the cus­tomers, their fash­ion fo­cus and tech­nol­ogy based work­ing sys­tem.

Speak­ing about their dis­tri­bu­tion sys­tem, Biyani said, “A good prod­uct has to be backed by a great dis­tri­bu­tion sys­tem. We have a ware­house at MIHAN in Nag­pur where we have in­vested in a state-of-the-art dis­tri­bu­tion fa­cil­ity. Ev­ery­thing that we shift from the fac­tory is now ready for stores. To­day, al­most 60 per cent of our clothes come with hang­ers al­ready at­tached and se­cu­rity tagged from the fac­tory it­self. This costs us more

money per gar­ment, but we have seen to it that there is no bot­tle­neck in the dis­tri­bu­tion of the gar­ments.”

“Also, 99 per cent of our prod­ucts are sourced in In­dia be­cause we be­lieve in sourc­ing closer to the end des­ti­na­tion,” he added.

SEA­SONS AND DIS­COUNTS

Ex­pound­ing on the pop­u­lar con­cept of fash­ion sea­sons and dis­counts, Biyani said, “The big­gest chal­lenge in or­gan­ised retail is posed by dis­count. In 2015, FBB also started dis­count­ing to in­crease sales, which failed to work. We re­alised that we were dis­count­ing be­cause we were think­ing and pre­par­ing too much ac­cord­ing to the sea­sons. But in In­dia, the buy­ing pat­tern does not change ac­cord­ing to the sea­sons. So, we de­cided to get rid of sea­sons and dis­counts, and it helped the en­tire man­u­fac­tur­ing cy­cle, the stock turn cy­cle and it made things sim­pler. Af­ter we moved away from the sea­sons, we are able to bring in more new stocks, the en­tire man­u­fac­tur­ing cy­cle and the sup­ply chain works very well and things have be­come sim­pler.”

CON­SUMP­TION AND FES­TI­VALS

Re­lat­ing ap­parel con­sump­tion with fes­tiv­i­ties in In­dia, Biyani said, “It is im­por­tant to re­alise that the con­sump­tion in In­dia takes place around fes­ti­vals. So, the more fes­ti­vals you will cel­e­brate in your stores, the more con­nec­tions you will be able to fos­ter. Our com­pany has in­den­ti­fied 72 fes­ti­vals in In­dia which we cel­e­brate. Stores in dif­fer­ent parts of the coun­try are dec­o­rated ac­cord­ing to the fes­ti­vals in those parts and we have stocks in keep­ing with the fes­ti­val. Busi­ness cer­tainly gets a boost dur­ing the fes­ti­val pe­riod.”

The dis­course was fol­lowed by a Q&A ses­sion with the in­dus­try play­ers, and valu­able ad­vice in the form of in­creas­ing fo­cus, in­no­va­tion, im­prov­ing prod­ucts and giv­ing the cus­tomers good value for good price was given by Rakesh Biyani.

The con­fer­ence ended with the fe­lic­i­ta­tion of Mr Rakesh Biyani at the hands of Mr Rahul Me­hta and Mr Naveen Sainani, who pre­sented him a bou­quet and a me­mento re­spec­tively. The Vote of Thanks was pre­sented by Mr Naveen Sainani.

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