Sagar Malviya, Economic Times
Mumbai, 15 April 2024

Spanish fashion company Inditex said it will launch youth clothing brand Bershka and Zara Home in India this year.

“Bershka will open its first store in Mumbai Palladium, and Zara Home will open in Bangalore,” it said in its latest annual report.

Inditex had launched fast fashion brand Zara in 2010 and premium clothing brand Massimo Dutti eight years ago. Its new offering, Bershka, will pitch it directly against Reliance Retail’s Yousta, which too targets the younger consumer segment.

Being the world’s second most-populous country, India is an attractive market for apparel brands, especially with youngsters increasingly embracing Western-style clothing. Fast fashion brands such as Zara and H&M became runaway successes soon after they entered the country.

Experts said Bershka’s target consumer profile is mostly teens to mid-20s, slightly younger than that of Zara, which is pitched at 20-40-year-old fashion-driven customers.

“The product assortment is different, with a higher share of knits, fewer dresses and more casual overall compared to Zara, keeping in line with the lifestyles of the customer group. So in that sense it wouldn’t cannibalise Zara in any serious way, though some of the younger set among Zara buyers could migrate some of their purchases to Bershka,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight. “The biggest question is, can they hit the price points that young Indian fashion consumers want as with domestic brands such as Zudio, Yousta and others, or will consumers overlook higher prices for the style mix and a European brand pull in significant numbers to make the brand viable.”

According to a recent report by Motilal Oswal, the ₹2.5 lakh crore value fashion segment accounts for 57% of the total apparel market and is one of the largest and fastest-growing segments. A substantial untapped opportunity beyond the metros and tier-1 cities, driven by better demographics, higher incomes and greater customer aspiration, has compelled several big players to enter a market that was previously dominated by regional and local operators.

Since its inception in 2016-17, Zudio has seen considerable expansion and reached nearly 400 standalone stores, outpacing most apparel brands primarily due to its competitively priced products with an average selling price of ₹300. Following the success of Zudio, a unit of the Tata Group’s Trent, the segment has seen the entry of national retailers in the affordable youth clothing segment such as Yousta by Reliance Retail, Style-Up by Aditya Birla Fashion and Retail and Shoppers Stop’s InTune.

(Published in Economic Times)

Mumbai, 29 March 2024

Sharleen Dsouza, Business Standard

With the IPL kicking off, speculations are rife that the former Indian cricket team captain M S Dhoni will hang up his boots after handing over the captaincy of Chennai Super Kings (CSK) to Ruturaj Gaikwad. However, brand experts believe this is not the end of the road for Dhoni as a celebrity, and he still has some mileage left even if he completely retires.

Dhoni is expected to continue being associated with CSK even after retirement, according to a media report. In an Instagram post, CSK said that Dhoni has handed over the captaincy to Gaikwad, who joined the team in 2019.

PTI first reported the story of Dhoni handing over the captaincy and quoted CSK Chief Executive Officer (CEO) Kasi Viswanathan as saying, “Whatever Dhoni does, it is in the best interest of the team. I got to know of the decision just before the captains’ meeting. You have to respect his decision; it is his call.”

Brand experts say that his brand value will carry through even after he leaves cricket. “He has done a lot of things, and his brand value will persist even after his retirement. There won’t be a drop in momentum immediately after he retires,” says brand expert Devangshu Dutta, founder of Third Eyesight.

According to Kroll’s Celebrity Brand Valuation Report, in 2022, Dhoni’s brand value stood at $80.3 million and was the sixth-highest-ranked celebrity, while he stood at number 5 in 2021.

Brand experts expect a drop, which is natural, but it certainly won’t be a crash in his valuation as brands would still like to associate with him.

Dhoni is also one of those players who can continue to build brand equity even once he retires completely from the sport, according to experts.

Also, the 42-year-old is one of those sportsmen who announced his retirement in phases. He announced his retirement from international cricket on August 15, 2020, and had earlier retired from Test cricket on December 14, 2014. This move, according to brand experts, has also worked in his favour as it continued to help him build his brand equity, and he did not see a sharp drop overnight.

“I think he still has some mileage left,” said brand expert Santosh Desai. He explained that Dhoni’s connection with people is still strong. However, he did not rule out a drop in his valuation but said it wouldn’t be a huge drop.

N Chandramouli, CEO of brand insights firm TRA Research, also believes that the former Indian cricket team captain has been wise with his investments.

“He will continue to remain relevant, and brands will continue to want him. He won’t be a celebrity who goes from hero to zero overnight if he retires after the IPL,” Chandramouli said.

He also explained that Dhoni is going out at a time when he is still performing and added that the question people will ask him at this stage is why now and not why not.

“Dhoni is one of those guys who has a lasting impression which will continue to appeal to brands,” according to Chandramouli.

(Published in Business Standard)

The ability of fashion businesses to endure and thrive in the face of stiff competition and changing market dynamics is all about adapting to innovation, customer-centricity, and strategic planning. The correlation between high performing fashion business and product innovation is undeniable.

This panel discussion brings Design and Business Heads together to brainstorm on how fashion companies can devise strategies to drive innovation to remain competitive, meet evolving consumer expectations, and stay ahead of the race.

Moderator: Devangshu Dutta, Founder & Chief Executive, Third Eyesight

Panelists:

• Anshu Grover Bhogra, CBO, Forever New
• Diksha Bhatia, Founder, Gioia Co
• Mansi Lohia, CEO, Black Watermelon
• Rohit Aneja, Director- Grapevine Designs, CEO be-blu! Lake Como
• Sean Ashby, Founder & CEO, Aussiebum
• Swikruti Pradhan, Founder, Rustic Hue
• Yogesh Kakar, Chief Product Officer – Tommy Hilfiger & Calvin Klein, PVH Arvind Fashion

An insightful must-watch discussion, moderated by Devangshu Dutta (Founder, Third Eyesight), with venture capital fund managers, investors and entrepreneurs in retail on what factors attract investors to retail businesses.

The panelists included Vikram Gupta (Founder & Managing Partner, IvyCap Ventures), Amar Nagaram, (Co-Founder, Virgio), and Vikram Gawande (Vice President, Growth, Blume Ventures).

Economic Times, 29 January 2024

High aspirational value, rising disposable incomes in non-metro markets, premiumisation, and social media boosting brand awareness have led to international retail brands growing at a fast pace while desi brands go easy on expansion.

Global brands such as Zara, H&M, Bugatti Fashion, La Vie en Rose, Adidas, Nike, West Elm, Starbucks, Uniqlo and Marks & Spencer are fast finding favour with Indian buyers. A significant propeller of their growth is small towns where buyers, willing to spend more, are getting more brand conscious.

According to CBRE, about two dozen international brands entered India in 2023 and expansion by global brands that are already present in the country have fuelled the demand.

Videshi retailers make more space

The retail sector recorded an all-time high leasing in 2023, taking 7.1 million sq ft across eight cities, an increase of 47% from last year despite large retailers slowing down on store expansion. A prominent factor in the growth was international brands. Retail leasing by international brands was almost 25% in 2023 compared to 14% in the previous year, ET has reported.

Canadian lingerie retailer La Vie en Rose made its debut in India in partnership with Apparel Group India and launched its first store in Delhi-NCR in July 2023 and later expanded in Pune and Bangalore. Similarly, Rimowa, a German luxury luggage brand, entered India through its partnership with Reliance Brands and opened its first store in Mumbai.

Other notable expansions by international players include French fashion & apparel brand Bugatti Fashion and the American furniture brand West Elm opening their stores in Pune, and American lingerie brand Victoria’s Secret opening stores in Hyderabad and Pune.

Making inroads into small towns

Three dozen big brands entered tier-II cities in the first nine months of 2023, as demand from smaller cities continued to be strong even after the pandemic. A good number of those were global brands.

Brands such as H&M, Marks & Spencer and GAP have entered cities like Indore, Mangalore, Patna, Ranchi, Mysore, and Coimbatore, according to data by CBRE. “India’s first retail REIT has encouraged developers to aggregate and upgrade their existing facilities, apart from developing new malls. Moreover, domestic and international fashion brands are looking to expand in non-metro cities, fueled by a well-aware and well-travelled consumer set,” Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, has said.

Desi retailers turn cautious

While international brands are expanding at a strong pace, desi retailers are turning cautious. India’s top retailers have significantly slowed down their store expansion this fiscal year, after opening a record number of outlets last year, ET has reported based on their latest investor disclosures. The top five retail chains – Reliance Retail, Titan Company, Avenue Supermarts that owns DMart, V-Mart Retail and Shoppers Stop – together opened 44% fewer stores in the first three quarters through December compared with a year earlier.

Top industry executives attributed the slowdown in store expansion to more focus on profitability when consumption had not picked up the way it was expected to and as most of the new markets are already filled up with two-four retailers, leaving little room for more outlets. It appears global retail brands are less vulnerable to these pressures.

Global brands buck the trend

Top global apparel and fast fashion brands appear to have struck a strong chord with young customers, racking up sales growth of anywhere between 40% and 60% in FY23, bucking the trend in a market where the overall demand for discretionary products slowed down, ET has reported based on latest filings with the Registrar of Companies.

For instance, Swedish fashion retailer H&M and rival Zara reported a 40% increase in its topline while Japanese brand Uniqlo saw a 60% jump in sales. American denim maker Levi Strauss and British brand Marks & Spencer posted a 54% increase. Dubai-based department store Lifestyle International, too, saw a 46% jump in revenues on a large base. These brands garnered combined annual revenues of nearly $2.6 billion, more than double compared to FY21 when it was $1.1 billion all put together.

“With consumers getting brand conscious, global brands have a natural advantage. There is a distinct aspirational momentum for international brands that carries them through. Also they can sustain having unsold inventory and discounting better than smaller peers,” Devangshu Dutta, founder of Third Eyesight, a strategy consulting firm, told ET recently. “Also, these brands have not yet reached saturation point in terms of network and hence can invest further to widen their reach.”

Even as international brands are aggressively adding more physical stores, the revenue surge was also led by brands’ shifting focus on ecommerce, which now accounts for more than a quarter of their sales, even as they face intensify competition from both local and global rivals in an increasingly crowded market where web-commerce firms continue to offer steep discounts. Over the past two years, sales growth for most retailers have been price-led, reversing the historic trend when volumes or actual demand drove a bulk of the sales.

The fashion retail segment has been struggling with a demand slowdown since January last year due to inflationary headwinds. The overall retail growth slowed down to 6% in both March and April, increasing marginally to 9% in August and September before falling slightly to 7% in October and November, according to the Retailers Association of India.

(Published in Economic Times)