India has a rich tradition of textiles which dates back many centuries. The history of the Indian readymade garment industry, however, is very recent and can be traced back to the Second World War.
During the Second World War, as a contribution to the wartime needs of British rulers, clothing units for mass production were set up to manufacture military uniforms. With India’s independence in 1947, the industry stagnated as the policies of the Government were now diverted towards building a new nation. However, the industry began to expand after 1959 with the revision of the textile policy to allow the import of machinery for manufacturing.
The 1960s witnessed social shifts as a whole generation of young people questioned the very basis of their existence, and the hippie movement was born. Tired of their materialistic ‘man-made’ lifestyle, these young people began to seek answers in communing with all things natural, love and peace being the anthem. They began traveling, to explore, to seek the ancient philosophies of the East.
This voyage of discovery not only led to a change of lifestyle, but also the way they dressed. Natural fibres were rediscovered, and principally amongst them “Cotton”. India, with its natural abundance of this fibre, was an automatic choice of a supply source. Simultaneously, the growing settlement of Indian abroad led to a ready outlet for a variety of India merchandise and clothing textiles as an article of trade because of its growing demand.
This sudden demand for cotton garments resulted in the Indian industry growing by leaps and bounds in a very short period. Export of “High Fashion” garments from India started off with the cheap cotton kurtas and hand-block vegetable dye printed wrap-around skirts in cotton sheeting to meet the demands of the western youth.
Cashing in on the boom any and everybody got into the manufacture of clothing. The Government, realizing the potential of earning foreign exchange for the country, announced incentives and tax exemption for exporters. The fallout was an industry that grew in an unorganized manner and developed a reputation for producing low cost, low quality, volume merchandise.
The 1980s established that the industry was here to stay but, in terms of product profile, India still had not been able to move out of the lower end of the world market and continued to have an average unit value of under US$ 5.
The 1990s saw the industry make a conscious effort to shake off the image of being producers of cheap, low-quality merchandise with unreliable delivery schedules. The second generation had begun coming into the business, and contributed to reorganizing their firms for clearer structure and professionalism. Funds were ploughed back into the business with the emergence of large and modern production facilities. Even though most of the export houses were family-owned, trained professionals were inducted into the business for clear-cut departments and areas of functions. Consolidation and retention of business was the focus of the late nineties as the abolition of quotas planned for the new millennium became a reality.
The industry was euphoric but at the same time apprehensive of what the post quota era would bring. Many of the producers looking for a synergy in the business and also to sustain the large production facilities began tentative forays into domestic retail. The face of the Indian consumer was changing. Exposure to the western society via the electronic media helped in creating a ‘borderless’ world for lifestyle products, and contemporary fashion merchandise found a ready market in domestic retail.
The new global consumer over the years has evolved as a demanding and yet discerning individual. The novelty factor along with price and quality has become the watchword of the new millennium consumer. As consumers around the world change, so does the product strategy to keep consumer interests alive and ensure loyalty.
The new millennium has seen the emergence of the ‘Quick Response’ or ‘Real Time’ merchandising in fashion as a strategic solution to nurture, retain and grow the business. ‘Fast Fashion’ was born. Retailers could no longer work on the concept of two major retailing seasons with a couple of promotions thrown in. Product planning and the merchandise on the racks had to be constantly current and trendy.
Fast Fashion is not simply a solution to increase consumption by introducing greater product variety but a strategy to retain, consolidate and sustain the market through proactive product development and efficient product delivery to consumers, and thereby grow the market by increasing market share or developing new markets.
However, fast fashion has been tried and tested in different avatars through the years. In the 1960s and 1970s it was present in the quick reaction time of the unorganized sector to service the demand for block-printed ethnic clothing merchandise. In the 1980s and 1990s it was represented in the proactively researched product development at the source market level by wholesale importer/designer buyers (like Rene Dehry, Giorgio Kauten, Diff and Steilmann). Today it is technology-aided product research and development techniques (practiced by Anthropologie, Rampage, Zara and H&M), coupled with responsive buying processes.
In product design terms, India has moved on from producing and selling ‘fashion basics’ to ‘basic’ merchandise, and now back to ‘fashion basics’ once again. History says that this is where India’s inherent talents and strengths as a source market lie. Rather than reinventing the wheel or try to catch up with other competitors strengths, India should cash in on its strengths to practice and master fast fashion.
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Saumya Roy and Gouri Shah
MINT (Partner to the Wall Street Journal)
Wed, 23 Apr 2008, Mumbai
Shopper’s Stop Ltd, the 24-store retail chain, got a new look at a glitzy function featuring actor Shah Rukh Khan, nightclub lighting and hundreds of saplings that will be planted as part of the stores’ Rs20 crore (Rs. 200 million) rebranding exercise.
The chain, which started in a defunct suburban Mumbai movie theatre in 1991, got itself a new black-and-white logo, uniforms, print and television campaigns, carry bags and even an anthem and an in-store radio channel. It will also launch an Internet shopping platform along with a Think Green campaign.
"Our customers are getting younger, so the brand cannot get older," said Govind Shrikhande, chief executive of Shopper’s Stop. "We wanted to get trendier without losing the experience of 17 years."
The rebranding comes soon after Lifestyle, a department store chain from the Dubai-based Landmark Group, announced a new campaign to highlight its shoes, kidswear and home accessories categories along with fashion.
"In the Indian market, the issue is of increased competition," says Devangshu Dutta, chief executive of Third Eyesight, a retail consulting company.
A slew of global apparel brands such as Guess, Esprit and French Connection have entered the market over the past two years, after foreign retailers were allowed to own majority stakes in their Indian operations. These brands have brought store design and experience in line with global standards along with fashion, encouraging Shopper’s Stop to change as well, Dutta said.
creation of a retail destination brand was an innovation in itself, says Anand
Halve, co-founder of Chlorophyll Brand and Communications Consultancy Pvt. Ltd.
"But as the category grows tangible, differentiators
such as store environment and experience have become hygiene factors, and that is when branding becomes important. It adds intangible value to tangible things."
Shopper’s Stop found that while younger shoppers came and bought the new brands
the store has been introducing, they did not associate with the store itself,
says B.S. Nagesh, managing director of Shopper’s
To woo younger customers, Shopper’s Stop will tie up with Blue Frog Media Pvt. Ltd, a Mumbai-based company that runs a live music club, and will have its own record label for an in-store radio station.
Shopper’s Stop, which currently occupies 1.5 million
sq. ft in total, will add 89 stores or 1 million sq. ft every year for the next
three years. It will increase the average size of its stores to around 85,000
sq. ft from
the current 65,000 sq. ft, Shrikhande said.
With organised retail expected to grow at around 42% till 2011, according to a report by Mumbai-based brokerage Edelweiss Securities Ltd, department stores will start to focus on subcategories within their stores.
"You will see subbrands being promoted in a big way to create an appeal among special segments in different categories," says Chlorophyll’s Halve.
By Sachin Dave & Vikas Kumar
THE ECONOMIC TIMES
14 April 2008, BANGALORE
Indian retailers are a worried lot these days. There has been a decline in margins and it’s one of the lowest ever, avow some retailers. As inflation touched a 41-month high, chains across the country, especially the smaller players, have been trying every trick in the book to attract consumers, and keep them coming in, even as they struggle to grow profitably.
The first and most critical area has been margins, and retailers have been bargaining harder with their suppliers. Says Pushpamitra Das, CEO of Wadhawan Food Retail that owns the Spinach chain of food and grocery stores in Mumbai, "Margins of all retailers have been affected and that includes us as well.
So we are trying to negotiate hard with our suppliers so that we can get goods at cheaper rates and pass the benefits to consumers." There has of course been a hit on margins as well, and that’s bringing in greater focus on supply chain efficiencies and vendors, adds Das.
"In our business supply is an important issue and we are now going to vendors who offer us a combination of the best price and quality." Spinach, like other stores, has been keeping a close tab on its competitors’ pricing on a daily basis, and adjusting their rates accordingly, if required. However, lately most retailers have ended up charging almost identical prices for groceries.
Data released by the Department of Consumer Affairs shows that retail prices of grocery products has reached a 39-month high. While sugar and oil increased by 11%, gram rose by around 3%, and vegetables such as onion have become dearer for consumers by 11%.
In manufactured items, sunflower oil shot up by 9% and vanaspati ghee (butter) went up 4%, while butter, mustard oil, sugar and groundnut oil became expensive by 1% each. And while the government took some significant steps to counter rising food prices, such as scrapping of customs duty on crude edible oil, reduction of duties on refined edible oils, and banning exports of non-basmati rice, among others, retailers are having to do much more to survive this bearish phase in consumer spends. Unable to reduce fixed costs, retailers are trying to control variable costs and thereby bring the total operating costs down.
Says Andrew Levermore, CEO of the K-Raheja group owned Hypercity, "Many products have become costlier and some customers are either buying less or postponing their purchases, affecting our sales directly." And while smaller players are finding the going tough, large players like Future Group’s Pantaloon Retail seem less ruffled. Kishore Biyani, CEO of Future Group, says, "Demand for low end products has seen a dip while high end products, which are not price sensitive haven’t been affected that much. We have still managed to give the best deals to our consumers in all segments." That may have to do with the leverage that more established chains like Pantaloon have with suppliers and manufacturers.
However, protecting margins can work only up to a point, says Devangshu Dutta, CEO of Third Eyesight, a retail consultancy firm based in Gurgaon. Eventually, with the prospect of thinning bottom lines, retailers need to work on making their businesses more productive and efficient. "There is a need to shift focus from expansion to optimising store operations," he says.
Meanwhile retailers are working on sustaining business through innovative promotional offers. Cross category promotions are now catching up where discounts are being offered on grocery purchases, redeemable against purchase of apparel and household products. Says RC Agarwal, CMD, Vishal Retail, "Most of us are now depending on promotional schemes. Even consumers have become more conscious and they would only go for the retail outlet which offers the best deal, in terms of offers and price."
Many brands on the other hand have marginally reduced the weight of their SKUs than increase prices. When asked whether the retailers have followed the same path for their in-house products, retailers deny any such measure for their private label brands.
Explains R Subramanian, managing director, Subhiksha, "I think on an average there has been a decrease of around 10% in the sales of grocery but year-on-year we have grown."
In the business of fashion, time has always been important. However, speed and efficiency are now both a strategic imperative and a tactical necessity. With greater unpredictability in the market, it is critical to have the correct product at the correct time in the right quantity. Fast fashion requires completely different thinking in the way product is developed, how pre-production processes are undertaken and how production is organised. The Fast Fashion Seminar will draw upon the live experiences of leading practitioners from the area of product development and supply chain. It will be structured as an interactive session. This Third Eyesight Fast Fashion Seminar will provide you with a valuable insight into how to effect rapid changes in the market to your benefit.
Among other aspects, it will:
Describe in detail the concept of fast fashion
Identify key strategic actions to meet fashion consumer demand
Detail how leading brands such as Zara operationalise the concept
Discuss how to achieve less than 1% inefficiencies in their processes from design to delivery, including inventories and markdowns substantially below the industry average.
Understand the underlying principles of the fast fashion model and how these might be applied to retail and fashion business models in India
Attendance is strictly by pre-registration. Registration information is also available over phone (please contact on phone +91-124-4293478 or +91-124-4030162).