Gloria Jeans, Russia moving towards high growth with increased sourcing from India
Gloria Jeans Corporation, Moscow a vertically integrated retailer and a fast-fashion leader in the Russian apparel industry, is spreading its wings. In 2017, the number of company-owned stores was 568, spread across Russia, Ukraine, Belorussia, Georgia and Kazakhstan. As per a market report by McKinsey Consulting, each store opening strengthens Gloria Jeans brand presence, which is already a favourite in Russia and recognized by a whopping 95% of Russian citizens. Compared to 2016, Gloria Jeans’ sales grew 20.1 per cent in 2017, totalling 40.8 billion roubles. The sales growth was driven by higher comp store sales by 10.5 per cent as well as higher selling space by 18 per cent. The company plans to open a new store almost every fortnight and plans to expand its presence not only in Russia and Belarus, but also enter new markets in Eastern Europe.
With expanding retail base, the company started its sourcing and liaison office in India almost twoand-a-half years ago and has since then noticed double digit growth in sourcing from India. The way the market is growing, the office is expecting same growth graph in the coming years, as new vendors are in the process to get associated with the liaison office, after some initial reservations. Heading the India office as Country Manager is Ashwani Marwah, an ex-Niftian having an experience of 26 years in the apparel industry and that too mostly on the sourcing side, having worked with retailers/brands like OTTO, VF Corporation, Ernsting’s Family, Lidl to name a few.
Ashwani is very upbeat on the prospects of business in Russia.
There is growth in the Russian market and many factors that will influence growth in retail, like presence of good quality merchandise at reasonable prices, which is a sure-fire formula for growth in any retail market. Brands like Gloria Jeans are bringing value for money on the table for the consumer and is also offering fast fashion with newness almost every 30-60 days in the stores – these compliments the value for money being offered. “Currently our sourcing from India is around 10-12 per cent of overall sourcing as we have offices in Shanghai, Vietnam, Hong-Kong, Bangladesh and Uzbekistan. We are expecting that in coming years sourcing from India will be 20 to 25 per cent of the total sourcing. Our main products from India are kids and ladieswear (value-added) mainly from in and around Delhi-NCR, where we have around 10 vendors for the same. Knits is not big in our sourcing basket at the moment though we are working with 4 suppliers in Tirupur, as exporters even in Tirupur are still not able to match our price points,” shares Ashwani. Though the prices are very sharp for Russian market, but Gloria Jeans plays on numbers as its average minimum order per style per colourways is 6,000 to 8,000 pieces.
Basic qualities in an exporter when considering him for Russia market, includes being basic socially compliant, price-aggressive and should have a track record of delivering on time. “Our compliance team does the initial audit prior to on boarding a new supplier. We are sensitive to compliance issues,” said Ashwani. To an exporter interested to work with Russia, Ashwani advices that it is a good and easy market provided we live up to our commitments with regard to quality, delivery and price; in reality this is no different from what other markets expect.
Talking about the warm response of Indian exporters that are working with Gloria Jeans, Ashwani further shared that initially there were little apprehension with few exporters about working in Russia, due to the past reputation of the country, but now they are quite enthusiastic. “They are receiving more orders from us. Initially they worked on LC but now they happily work on TT and don’t seek advance also.” He further added that it is a myth that the Russian market is very difficult to work in, be it because of payment or language issues. “Most of the top brands or retailers are having their offices in Russia and many English-speaking professionals are working there. Regarding payment, one has to be very clear about terms and conditions. Payment risk in Russia (mainly with importers or wholesalers etc.) are as in any other country across the globe. I don’t see there is any issue to work with Russian markets, one has to change its perceptions. Nowadays there is nothing that is a major deterrent in working with the country, the exporters need to be more open and flexible,” concludes Ashwani.
Ashwani Marwah, Country Manager – India, CJSC Gloria Jeans Corporation