“My weekend went off fast shopping at the mall,” my young neighbour chirped as she took a brisk walk with me. This enthusiastic careerist, a banker by profession, is on a wardrobe modification spree. “I picked my dresses from Mango and Zara, a hand bag from Nine West. Next week I’ll pick up some decent kurtis from my aunt’s boutique,” she gleamed as she revealed. Lucky spirited soul! Yet, it struck. A vivid picture of youngster’s shopping preference. Where are the Indian brands in her list? In “Shining India” do these brands have any reasons to shine? Time to be on alert!
Me-too syndrome
Why the international brands are ahead? They know how to create demands and this leads to innovation in merchandise. These brands are constantly feeding consumers’ aspirations and offer more options for look and style. They know the importance of being unusual. Founder of Diesel, Renzo Russo’s, famous words are: “I am allergic to ordinary”. The message is clearly conveyed in its outlets. The rugged, tough look and feel is created through old world charm that goes to the extent of creating a store structured as an old wooden radio. Such innovation people cannot forget and this ensures highest degree of brand recall. For obvious reasons, they have higher brand recognition. Youngsters wearing Ralph Lauren, Diesel or Zara is recognised as cool nowadays. Indians are now much more aware of the brands around; so, an affluent woman would love to don Mango rather than any home-grown brand. But, there is always scope for the home grown brands to innovate, to carve a niche for itself. For Indian wear brands, their USP is the ethnicity, whereas home grown western wear brands have no such tradition-backed USP, neither they have strong unique brand identity. And this is where these brands are falling flat, whose offerings are nothing but the desperate replication of international big brothers.
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Narrow down target group, align brand philosophy Gaurav Marya, President, Franchise India, pinpoints the missing components in the survival story of the home grown fashion brands. The brands should have a certain philosophy and should connect to that philosophy effectively rather than turning into a me-too brand. Based on this philosophy, the brand should have a cleverly chosen target group. It should not be very wide. There were brands which aim to cater to 18 years old to 50 years old. They did well in the market, but that phase has gone. This concept now works only for hypermarkets which can afford to have that range of offerings. For small formats the offerings should be for a limited customer base with strong USP. The me-too brands are very weak in their USPs. This is high time for identifying customers, which can be geographically centred, or else it can have pan India presence, but brand should be built up based on that particular target group. There are brands like Levi’s and Diesel which have established themselves as a denim brand across the world, but the Indian brands dilute their identity which lacks in specification with too much mixed up offerings. It may at one point seem like losing scope, but it actually secures the future of the brand in terms of increased opportunity and increased brand loyalty. Customer engagement through exciting store experience Brand packaging should be aligned with this philosophy. Brand philosophy should be infused to the last mile in every touch point for the customer engagement. Today, what’s challenging is consumers are a way ahead in terms of brand awareness and exposure. We should build unique store experience around the brand philosophy. Ralph Lauren has created fantastic store experience at the brand’s every touch point. This in-store experience can be enhanced through visual merchandising and in-store promotional activities. Somebody walking in the store should feel the brand’s USP at once. Invest in designing front Indian fashion brands should engage top talents from global fashion arena. There’s no Indian brand that has hired best talents in design from the places like Italy, London or Paris, who are pioneer in this field. By the time Indian brands gradually attain such maturity in fashion productions, we can outsource designs from these globally acclaimed designers. We have great production capability, but we thoroughly lack in design capability. With production expertise, Spain has utilised the best designers from France and Italy. Dare to bring differentiation Indian brands cannot be as fast as a mature brand, Zara, in introducing new styles, but so called Spring/Summer and Autumn/Winter collections should have considerable differentiation to evoke consumers’ interests. Indian brands are too scared to experiment with designs. Bring in differentiation and this involves risk taking. Without risk taking, Indian brands will never grow. |
In nowhere space
Today, in India the retail sector is clearly divided into two segments – aspirational, style based, label based segment driven by well-known brands, and then there is value-led brands who sell the cheapest product at the best value. In this space, big box private labels always lead. Value is definitely one winning strategy. Walmart’s success seconds this fact whose private label shirt tops the popularity chart across the globe. But, mid-sized Indian fashion brands are not enough backed with capital to be in value-led segment; they don’t have the capacity to produce volume and compete with big box. One glaring example is Koutons’ debacle. Koutons is burdened with a debt of Rs 600 crore, and is undergoing a corporate debt restructuring process. Retailers like Ess Aay Fashion India Pvt Ltd, Ankit TNG Retail India Pvt Ltd and Catmoss are shuttering down their stores. Dripping capital flow, for profit margin touching the lowest level, is not enough for their sustenance. Some home-grown brands, such as Provogue or Wills Lifestyle, could not match the consumers’ aspirations. These two brands have powerful marketing communications with endorsement of high profile Bollywood actors or sponsorship of a mega fashion event as the support to grow, but these communications do not translate at the store level.
Lost identity
If the Indian brands want to be on par with the global brands in 5-10 years, they need to exude the same global confidence. Indians are not against made-in- India products, unlike many markets where the consumers are not excited about home-grown brands. We’re proud to have made in India products, but we’re becoming discerning buyers with a very high consciousness of brands that we love to flaunt. Rohit Bhasin, Partner & Leader-Retail & Consumer Practice, PWC India, states that for a home-grown brand to survive the onslaught of burgeoning international brands, it has to work on price points, quality and differentiation. Fab India, Kimaya and Satya Paul are among few brands that have carved niche with its unique product offerings. Zodiac, a home-grown shirt brand, is competing with the brands like Peter England and Allen Solly for its quality and reasonable pricing strategy. Chiragh Din, a Mumbai-based shirt brand is doing a pretty good business for its unique styling. The success lies in exploiting niche. There are some brands from the houses of Madura and Arvind who are revamping the style, design and look of the store. Despite having rich legacy, fashion brands like OCM and Grasim are lost in oblivion for failing to make a unique position in the market. Considering their long presence in the market, they had ample scope to build a story around like Tommy Hilfiger. The jingle for “Only Vimal” is unforgettable, but where is the brand “Vimal” now?
Sans differentiation
Another way to stay in the race is to specialise the personality of the brand, like an international brand (read here Nautica), which is bold enough to come up with fashion lines based on sailing or ocean. Such advanced thoughts Indian brands have failed to incorporate. Exceptions are always there, such as the Indian brand, Woodland, which is doing well since it has a specialised positioning as an adventure wear brand in the market.
Service below par
How customer-friendly are the services offered by the home grown brands? Marks and Spencer have the policy to cash back within a certain period of time. Can our Indian retailers afford to be so generous? How much these retailers invest to train the sales persons? Even today, retail is not a profession by choice, and we hope that over time this problem will ease out with more training institutes supplying the talents. Indian retailers are gradually learning through the hard facts and picking up the best practice for maintaining lean logistics. Many times, these outlets do not have the proper plan for merchandising, sizes are not available or IT systems get crashed. Putting everything in place takes money and when sustenance is a huge problem, the world-class services seem to be out of sight. Retail being a capital intensive business needs constant supply of money, but still some brands could not do well despite receiving external funding. “When funding is not used with a purpose, the failure is bound to happen,” comments Bhasin.
For many brands mindless expansion led to cannibalisation. According to Bhasin, for the domestic brands, business focus at the local level is required. But, ultimately differentiating factors can only infuse fresh blood to a sinking business as online presence and capital support enables international brands to reach anywhere.
Good part of the story is that back track of the Indian fashion brands is a part of the ongoing process. The scope for rectification is always there. Downturn equips brands with new learning and revived zeal. Japan’s bargain store chain, Uniqlo, is back to its full form when Japan is troubled by weak economy. Time is always there to win.
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Sliding down (As reported last year) Cantabil Closed down more than 150 stores Incurred a loss of Rs 30 crore Loot Closed down 20 stores Anticipating 20-25% drop in sales in FY 2012 Provogue Closed down 19 stores Sold out Promart, its value retail format Rising high Kimaya has carved a niche for itself § Designer portfolio of over 200 names § 35,000+ sq ft across India and Dubai § Received a PE investment worth Rs 60 crore from Franklin Templeton § Is launching an e-commerce site in the next month § Has launched KARMIK, its prêt concept “The brand has had international tie-up in the past with many brands like Versace’s Versus, Pinko, Trussardi, etc, but currently it is concentrating more on expanding its pret concept – KARMIK, as well retail expansion of KIMAYA. The brand is open to tie up with any global brands that resonate with similar beliefs.” Pradeep Hirani CMD, Kimaya Fashions Pvt Ltd DLF Brands: over 100 stores across 14 cities § Overall growth rate of 70-80%, and same store growth of about 25-30% “In two seasons, ie, Spring/Summer and Autumn/Winter these brands introduce new styles. In the beginning of the season, 50-60% of the stock arrives in the store, and every two weeks, stocks are replenished.” Dipak Agarwal CEO-Operations & Strategy, DLF Brands Bestseller: young in the market but strong in growth § In the last four years Bestseller opened 99 sales points, 44 of them are EBOs § Targeting tier II & III cities “Bestseller has an extensive design and product development team which works a year in advance to deliver the latest in trends and styling.” Vineet Gautam Country Manager, Bestseller Retail India |
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