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August 28, 2023
Bindu D. Menon, Financial Express
August 28, 2023
Calvin Klein, Levi’s, Adidas and Lacoste are among the several players who are looking to tap the potential of Outlet malls, which are generally located on the peripheries of cities and major highways. These malls are fast replacing the old factory outlets of major brands, which were located in the cities in crowded places.
Real estate developers are also strategically choosing such locations to attract a wider customer base. Value-driven customers are thronging to such malls as it offers branded products at a discounted price ranging from 30-70%.
A few companies FE spoke to said Outlet malls are refined version of factory outlets and companies are able to generate revenue by liquidating stocks at a lower price.
Outlet Malls are a concept popular in the international market and are a huge hit among travellers. They are typically large group of shops outside city periphery that sell apparel, shoes and luggage at a discounted price. In the last decade, Outlet malls have sprung all over the country especially adjoining highways.
In New Delhi’s Jasola district, Pacific Premium, real estate firm has opened premium shopping space. Pacific Group operates around six malls spread across Delhi and Dehradun. Its new premium outlet mall is its largest to date and has four storeys and sizeable parking area.
The mall houses aspirational brands such as Birkenstock, Tommy Hilfiger, CalvinKlein, Levi’s, Adidas, Madame, Lacoste, Vero Moda and American Eagle among others. Other leading brands such as Nykaa and CaratLane, too have signed lease for occupying mall space.
Players like Village Groupe are developing mixed use development space in off location like Khapoli on Mumbai-Pune highway, Ludhiana and even Jaipur highway. A company disclosure says that it is developing over 500,000 sq feet mixed use space off-city limits.
“Outlet malls are a great opportunity for consumers who want to get the touch and feel experience. To that they offer brands at a discounted price is huge attraction for consumers,” said Susil S Dungarwal, promoter, Beyond Squarefeet Advisory, a mall management advisory firm.
Asked if online companies will pose a challenge to Outlet malls, Dungarwal says that there is no competition. “Outlet malls are an impulse destination. A consumer may be travelling along a highway, a good mall with discounted brands will be sure shot attraction,” he said adding growth in private vehicles has given a shot in the arm to Outlet malls.
“Till mid 1990s only 20% of vehicles on highways were private vehicles (cars and buses) and the rest were commercial vehicles (trucks and lorries). However, in 2023, almost 60% of the vehicles on highways are private vehicles,” he said.
Devangshu Dutta, Founder, Third Eyesight, said, “Outlet (discount) stores sit at the confluence of a mutual need. Branded chains with excess inventory to liquidate which they don’t want to carry at their primary stores, and consumers who want lower prices for their purchases”.
He points that outlet malls can offer brands some of the same advantages as regular malls, in terms of acting as footfall magnets, and offer shared services, but at lower costs due to a cheaper location.
“Rather than creating their own standalone outlet stores, brands can take up spaces in an outlet mall. The challenge of maintaining and managing footfall is shifted to the mall. However, as with regular malls, outlet malls need to be located well and need to be also managed well,” he added.
According to consultancy firm Anarock, top cities have over 51 million sq feet of mall stocks across the country with Delhi-NCR, Mumbai Metropolitan Region and Bengaluru accounting for 62% of the total stock.
(Published in Financial Express)
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August 3, 2023
Viveat Susan Pinto, Financial Express
August 3, 2023
The country’s largest organised retailer, Reliance Retail, is working on a new value retail store format called Yousta. The move will pit Reliance Retail directly with Trent’s Zudio, Landmark Group’s Max Fashion and Shoppers Stop’s Intune, informed sources have told Fe, as growth prospects beckon in the category.
Reliance Retail will roll out the new Yousta stores of around 5,000-10,000 sq. ft. in size in cities such as Hyderabad, Delhi and Mumbai in the initial phase, the sources said.
Pricing will be competitive at under Rs 500 per unit, targeted at youth, children and families.
A gradual ramp-up of stores across more metros and cities will happen in the months ahead, as Reliance Retail is looking to take store count of Yousta to around 200-250 over the next few years. The retailer is speaking to malls and high streets across cities to lease space for the new format, persons in the know said. Executives at Reliance Retail were not immediately available for comment.
However, some experts see Reliance Retail’s move as a belated acknowledgement of a segment that constitutes nearly 90% ($45 billion) of the estimated $50 billion domestic fashion market. The premium end is pegged at 10% ($5 billion) of the domestic fashion market.
“Much of the attention of apparel retailers in recent years has been at the top-end of the fashion market. While affluence at the top-end is high, the space has also become crowded with local and international brands,” says Devangshu Dutta, chief executive officer at Gurugram-based retail consultancy Third Eyesight.
“The larger value retail market has consumers in the middle and lower middle class who while being conscious of their budgets are also aspirational,” he says. “With the right product and pricing, volume sales can be significant in this segment,” he says.
Reliance Retail has an existing value retail format called Reliance Trends, which has nearly 2,500 stores across the country. However, the company has been looking to broaden its appeal in the category with more store formats, sector experts said. Yousta is expected to fill that gap, they say.
“The value retail market has long-term growth potential because there are number of consumers who are moving from unbranded to branded products. They are looking at affordably-priced branded goods, which value retailers can cater to,” says Aliasgar Shakir, retail analyst at Mumbai-based brokerage Motilal Oswal.
Some experts say that the discretionary slowdown in the marketplace has pushed apparel retailers to look at the value retail space more closely.
“Intune is a ‘Fashion For All’ format, which is one of our strategic initiatives to cater to young families,” Venu Nair, MD & CEO, Shoppers Stop, said in a recent investor call.
Nair admitted on the earnings call that the apparel segment in general has been witnessing moderation and that the value retail foray could help the company tap into the growing trend for affordable fashion and lifestyle products.
Trent’s Zudio and Max Fashion have big plans for the category. At Trent’s FY23 annual general meeting held recently, the company said it would open 200 stores of Zudio in FY24, much higher than estimates of analysts. In FY23, Trent had opened 117 Zudio outlets taking the total store count of the brand to 352.
Max Fashion will add 100 stores in the next one year, top officials at the company said, taking its total outlet count to close to 600.
(Published in Financial Express)
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June 30, 2023
Pooja Yadav, Afaqs
June 30, 2023
Over the last two-three years, we have seen technology innovations making its way into the Indian jewellery sector. Brands have been trying to transform the online jewellery segment by using various technologies like augmented reality (AR), artificial intelligence (AI), live video assistance, computer-aided design (CAD), computer-aided manufacturing (CAM), and more.
Despite the numerous innovations, the offline jewellery segment is still ahead of the online space, when it comes to sales. What makes the offline jewellery segment outpace the online segment?
The Indian e-commerce market is expected to grow to $111.40 billion by 2025 from $46.2 billion in 2020, as per an International Institute of Gemology report. While the segment remains to grow, what drives it back is the customer preference for physical jewellery stores.
Vipin Nair, marketing head & CRM at Malabar Gold & Diamonds, points out, “As of now, there seems to be no real alternative to trying on jewellery pieces in a retail store. Brands have been able to crack the logistics part, but not the ‘feel’ part. AR/VR has been around for a long time, but it doesn’t give you a feel of the jewellery pieces. It is a poor technology. The big purchases will continue to happen only in offline stores.”
Nair adds that despite the many challenges in the online space, it is now growing faster than before. “Earlier, there was a disconnect in the online segment. A customer had to wait for two-three weeks to receive a product. The online platforms seem to have cracked this business model, as whatever you like today, you can order and get it in a day’s time.”
Online jewellery segment started gaining popularity in 2020. In 2018, Tanishq started its e-comm website, and many other brands accompanied it in the online journey. What started with Tanishq has become a new journey for many start-ups and brands in the online space.
During Covid, the jewellery industry has been one of the worst-hit. Advent of online shopping and consumers relying on digital platforms during pandemic, helped brands strategise and invest more on online platforms.
According to Devangshu Dutta, founder and chief executive of Third Eyesight, trust is important when one is buying jewellery.
“It’s not a question of innovations. You can have virtual trials, whether it is online or in a store. But at the end, the customers have to see the piece and then buy it. Even if you are an online brand, you have to be able to offer an omnichannel experience. You have to enable in-home experience.”
As per Dutta, what’s required in this segment, is a change of mindset. “The share of online and modern retail will grow with time.”
Brands like Tanishq, Bluestone, Malabar, Kalyan Jewellers, Tata CLiQ, etc., are working on newer technologies. Then there are new players like the Aditya Birla Group that is set to foray into the branded jewellery retail business, with an investment of Rs 5,000 crore. The group’s new venture ‘Novel Jewels’ will have in-house brands in large-format exclusive retail stores across India.
Rashi Goel, founder and CEO, Performonks, says that the new brands entering the category, are trying to change the rules of the game. “These brands cater to working women, who want lighter, modern and fashionable pieces that they can match and wear with their outfits every day. So, the battle will be of brand building.”
“Tanishq offers light pieces, but tends to advertise heavy wedding jewellery, because that is in line with the category codes. The Aditya Birla Group will have to differentiate itself through the product experience. It will have to tell a brand story that takes the category narrative forward. If it is targeting young women looking for modern styles, it may benefit by having a direct-to-consumer (D2C) element (alongside retail stores in big cities). It could incorporate technology, where women can ‘try on’ jewellery virtually on the app.”
Recent trends
Citing the World Gold Council, Asian Lite International reports that there is a growing demand for lightweight and studded jewellery. Bridal jewellery alone accounts for at least half of the market share.
“Women prefer lightweight jewellery because it is practical and blends well with a modern lifestyle,” shares Nair of Malabar Gold & Diamonds.
Technology innovations may bring in some challenges, but they are also helping many people, in terms of convenience and choice. The online segment, which is still a fraction of the offline segment, is lately generating interest among digital savvy millennials.
Puneet Mansukhani, partner, KPMG in India, states that the online jewellery space has been garnering significant attention, especially amongst the millennials.
“Customer expectations are changing. Personalisation is playing a critical role. Technology involvement is increasing by the day, with AR taking the lead. However, the industry still has to tackle challenges around pilferage.”
On the upcoming trends, Mansukhani says, “Jewellery which is made to order with a modern look of hyper-personalisation (customised), is gaining importance, considering that value and convenience continue to be the top drivers of consumption.”
Manufacturers are increasingly focussing on producing lightweight pieces to satisfy the demands of young consumers, especially those who want to wear gold jewellery that matches with their western outfit every day, as per a World Gold Council report.
According to Third Eyesight’s Dutta, since fashion (lightweight) jewellery usually doesn’t cost much, “a consumer is not that invested in it. You can buy it online, like any other fashion product.”
The World Gold Council report adds that studded jewellery – known as ‘Polki’, ‘Kundan’ or ‘Jadau’ – has an estimated market share of 15-20%. The share of studded jewellery in North India is considerably higher. In South India, consumers are more inclined towards gold products, 60-70% of which are studded with diamonds and the remaining 30-40% are set with precious or semi-precious stones.
Jewellery landscape
In India, jewellery was traditionally purchased for investment purposes. People used to believe in buying heavy jewellery. But now, there’s a shift towards versatility and contemporary jewellery.
Nair states, “Contemporary designs are getting a lot of traction lately. It was not the case 10-15 years back. Lightweight jewellery is now in vogue and heavy jewellery is restricted to occasions like weddings. People now are looking for something practical. They are more into the design, quality, etc.”
Will the changing consumer preferences impact the bridal jewellery market?
Bridal jewellery dominates the gold jewellery landscape, with 50-55% of market share. Indians usually purchase gold for two occasions – weddings and festivals.
Around 11-13 million weddings take place in India every year. With women marrying at an average age of 22 and more than half of the country’s population below the age of 25, the demand for bridal jewellery will remain strong over the long-term, as per the World Gold Council data.
Going forward
The jewellery manufacturing landscape in India is largely unorganised and skill-intensive. Most jewellery pieces are still hand-crafted by artisans.
“Hence, the scale continues to be limited. Although we are gradually seeing jewellery retailers invest in large set-ups. We are also witnessing the overall jewellery market heading towards formalisation on the back of GST, government policies around hallmarking and exports,” shares Mansukhani of KPMG.
“For large players looking to enter this space, automation and focussing on in-house manufacturing, could help jewellers counter the high manufacturing charges.”
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June 29, 2023
Raghavendra Kamath, Financial Express
June 29, 2023
Zara, touted as “Fast Fashion Queen”, has achieved a unique feat in India. The Spanish brand has been growing its revenues without opening any new stores.
The fashion brand, run by a joint venture between Tata-owned Trent and Spain’s retail group Inditex, posted a 40.7% growth in its revenues to Rs 2553.8 crore in FY23. The catch is that while many retailers/brands garner sales from opening new stores, Zara did not open any store but closed one during FY23.
In FY21 and FY22, its store count remained constant at 21 but its revenue grew 61.2% in FY22. Zara’s revenues grew at a 15.5 % CAGR in the last five years.
“Zara did not foray into any new city and closed one store. That said, it saw an exceptional performance on store productivity (83% higher than FY19). The increase in revenues lead to highest ever Ebitda margins at 16.3%,” said Nuvama Institutional Equities in a recent report.
The contribution in productivity includes contribution from online and also increase in store sizes, the brokerage said.
A mail sent to Inditex did not elicit any response. Trent executives could not be contacted.
Experts attribute Zara’s success to increase in customer spends and improved offerings by the brand.
“The customer base they are targeting has grown and their merchandise mix has become sharper,” said Devangshu Dutta, chief executive officer at Third Eyesight, a retail consultant.
Dutta said when a retailer opens stores, it would immediately boost sales, but to maintain sales momentum, one has to have “right merchandise at right price and have stores at right locations”.
Zara is known to churn its designs and styles very fast, and target young customers. In its Indian venture also, its parent Inditex controls merchandise mix and so on.
“The said entities (Zara and Massimo Dutti) are obliged to source merchandise only from the Inditex Group. Also, the choice of product & related specifications are at the latter’s discretion. Further, the entities are dependent on Inditex for permissions to use the said brands in India subject to its terms & specifications,” Trent said in its FY23 annual report.
Zara is also focusing on opening in select locations, a reason it could not open more stores in the country, experts said.
“The incremental store openings for Zara continue to be calibrated with focus on presence only in very high-quality retail spaces,” Trent said.
Susil Dungarwal, founder at Beyond Squarefeet, a mall management firm, said that propensity to spend has gone up among Indian shoppers after the pandemic and Zara being a renowned global brand with its stylish merchandise seems to be have been the beneficiary of the trend.
“They understand customers very well and brought products which are liked by Indian shoppers in terms of looks, styles and so on,” Dungarwal said.
Zara is a case study for Indian brands as to how to run a retail business successfully, he said.
(Published in Financial Express)
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June 20, 2023
Kuldeep Chauhan, Editor-in-Chief, HimbuMail
20 June 2023, Shimla/New Delhi
For the first time in India, a conference brought together influential religious figures and water practitioners, establishing a powerful alliance with a shared vision of safeguarding water resources for future generations.
There is no disagreement over sanctity of water in all religions. But problem is how different communities and their followers take up the task to conserve and protect water and on which scale of their involvement?
There are individual success stories in Assam, Himachal, Ladakh (Ice Stupa), Uttarakhand, Rajasthan, Maharashtra and other places where individual initiatives have created wonders conserving water and forests.
There are tribal communities in the Himalaya who live in harmony with Nature preserving and protecting water and bio-diversities. But the challenge is how to bring all on board to protect water, forests and glaciers from depletion.
The conference brought Religious leaders from various faiths together at N D Tiwari Bhawan in New Delhi on June 18 and addressed the pressing need for water conservation and management.
Under the banner of “Water Security and Peace” the conference witnessed the convergence of diverse religious teachings. They all emphasized the paramount importance of protecting nature.
Recognizing that the protection of water is a fundamental responsibility outlined in religious texts worldwide, the religious leaders urged a global awakening towards water conservation and peaceful coexistence.
During the conference, several key decisions or resolves were made.
Religious leaders pledged to collaborate closely with social workers to preserve India’s faith in the sanctity of water and nature.
A comprehensive water literacy campaign will be launched across universities, colleges to promote awareness and ensure water security.
Notably, Chetna Yatra, a symbolic journey led by religious leaders of all faiths, will be organized to raise awareness about groundwater recharge, inspiring communities to actively participate in conservation efforts.
Eminent subject experts from across the country shed light on the dire consequences of the water crisis compounded by climate change.
The conference drew a diverse audience, encompassing individuals from all walks of life who united in their resolution to forge ahead in water conservation initiatives.
Dr. Rajendra Singh, President of the People’s World Commission on Drought and Flood said the impending water crisis threatens global stability. “To avert this crisis, people from all segments of society must unite, as only through collective action can peace be preserved.”
Dr. Indira Khurana, President of the Himalayan River Basin Council, expressed her concern about the unexpected swiftness with which climate change impacts have affected humanity. Underscoring the gravity of the situation, she stressed the urgent need for society to address these challenges together, transcending societal divisions.
The program’s convener, Maulana Qasmi, highlighted that religious leaders felt a shared responsibility to stand alongside society in protecting nature. “Their aim is to awaken society to the critical subject of water conservation, fostering a deep sense of awareness and urgency.”
The conference featured the insightful perspectives of notable figures such as Sudarshan Das from the Mahanadi Bachao Andolan in Odisha, Vinod Bodhankar from Pune, Neeraj Kumar from Bihar, Deepak Malviya from Kanpur, and Anil Sagar, Arun Tiwari, Ibrahim Khan, Raj Kumar Sangwan, Subodh Nandan Sharma, Lakshmi Bhatia, Devangshu Dutta, among others.
Over 140 participants passionately shared their views, further fueling the collective resolve towards water conservation.
National convenor of Jan-Jan Jodo Abhiyan, Sanjay Singh, emphasized that the time has come for people of all religions and social classes to unite on a massive scale, collectively spearheading the cause of water conservation.
Distinguished representatives from various faiths graced the event, including Dharma Guru Swami Sushil Goswami, Vivek Muni representing Jainism, Ijazak Malekar from Judaism, Father Sebastian from the Christian faith, and Shri Mahant Vivekanand. Maulana AR Shaheen Qasmi and Mr. Tariq represented Islam, while Dharam Singh Nihang advocated for the Sikh faith, and Mr. A.K. Merchant shared the views of the Bahai faith.
The historic conference, organized by the People’s World Commission on Drought and Flood and the World Peace Organization, serves as a powerful testament to the growing realization that water security and peace are intricately intertwined.
The religious leaders have taken up the mantle of environmental stewardship in India and it remains to be seen how the people and other NGOs, bodies and government agencies replicate the resolves on the ground zero.
If what is resolved at Conference gets practiced on ground zero, the Nation and the world stand poised for a better future where collective efforts pave the way for a harmonious coexistence with nature.
