Indian exporters need to change mindset and move beyond myth
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.