In­dian ex­porters need to change mind­set and move beyond myth

Apparel Online - - Emerging Market -

Al­though the over­all ap­parel ex­port from In­dia to Rus­sia is not much, but growth seems im­pres­sive. Ac­cord­ing to of­fi­cial data, in cal­en­dar year 2016, In­dia’s to­tal ap­parel ex­port to Rus­sia was just US $ 65.78 mil­lion and in

2017, it grew 28.46 per cent to reach US $ 85.5 mil­lion. A ma­jor por­tion of growth was in wo­ven gar­ments as this seg­ment surged 60.52 per cent while growth in knit­ted gar­ments was just 4.03 per cent (see graph for de­tail). Ap­parel On­line talked to many ex­porters across the coun­try, a ma­jor­ity of who have never worked with them. The rea­sons were the usual ones: pay­ment is­sues, lan­guage bar­rier, com­pli­cated doc­u­men­ta­tion, mafia cul­ture and never got en­quiry…, to men­tion some.

Not sur­pris­ingly, these rea­sons have cre­ated a trust deficit that stops ex­porters from ex­plor­ing the Rus­sian mar­ket. But in­ter­est­ingly there are few ex­porters who are work­ing di­rectly with Rus­sian buy­ers and do­ing busi­ness as com­fort­ably as they do with any other coun­try of Europe or US. They have none of the above-men­tioned is­sues but they are also of the view that in re­cent years the de­val­u­a­tion of ru­ble was a big is­sue for them and it im­pacted highly on the price. (Fi­nan­cial cri­sis in Rus­sia dur­ing 2014–2017 was the re­sult of the col­lapse of the Rus­sian ru­ble be­gin­ning in the sec­ond half of 2014)

Few ex­porters do see some down­fall in or­ders also but busi­ness is con­tin­u­ous with them.

Some of the stake­hold­ers of the in­dus­try hav­ing ex­pe­ri­ence of work­ing with Rus­sian mar­ket are also of the opin­ion that there is a seg­ment in Rus­sia who work in un­or­ga­nized way and all the above-men­tioned is­sues come when any ex­porter is work­ing with such seg­ment. The re­al­ity is that the ap­parel seg­ment con­tin­ues to be highly frag­mented in Rus­sia, even in 2017, due to the strong pres­ence of no-name prod­ucts and un­known brands from Asian man­u­fac­tur­ers. The strong po­si­tion in ap­parel was based mainly on the pro­lif­er­a­tion of low­cost lo­cal and for­eign un­branded prod­ucts with de­signs sim­i­lar to those of the lead­ing brands.

In this sce­nario, or­ga­nized re­tail­ers and brands in Rus­sia are grow­ing and ex­porters work­ing with such com­pa­nies have also seen growth from their Rus­sian op­er­a­tions. Over­all, ex­perts feel that per­cep­tion about do­ing busi­ness in Rus­sia needs to change. More­over, ap­parel ex­port busi­ness is al­ways full of chal­lenges and every day a new chal­lenge presents it­self, so why can’t In­dian ap­parel ex­porters se­ri­ously try to over­come chal­lenges of Rus­sian mar­ket, if they are look­ing for a very po­ten­tial mar­ket. No doubt, Rus­sia has many po­ten­tial buy­ers that pro­vide a good chance of big growth in fu­ture for the ap­parel in­dus­try.

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