Fashion 2024 & Beyond: Adapting to Changing Innovation Dynamics (VIDEO)

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February 21, 2024

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

Package Deal

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February 21, 2024

Sharleen D’Souza, Business Standard

Mumbai, 20 February 2024

Over the past year, Amul has undergone a transformative journey, evolving from a dairy-centric entity to a comprehensive foods company.

Since 2022, PepsiCo India, too, has embarked on extensive launches in the food category.

Not to be left behind, ITC, which has been introducing an average of 100 fastmoving consumer goods (FMCG) products across categories every year, has also launched a number of packaged food items.

The shelves in stores are packed. The options on e-commerce platforms are dizzyingly aplenty. The consumer is spoilt for choice. Which flavour of oats to go for? What packet of chips to pick? Should one reach out for those mouthwatering frozen snacks or think healthy and opt for atta (wheat flour) cookies?

Companies are pulling out all possible goodies in the form of packed food.

It is a strategic shift initiated during the pandemic and which has proven to be a lasting trend. During the pandemic, when other businesses were curtailing expenses, food companies started launching new products as consumers turned to packaged food.

Amul identified a growing preference for purity during the pandemic, and realised that this preference was here to stay. The company aggressively expanded its product range, venturing beyond dairy into items such as organic dal, atta, and basmati rice.

“We noticed that consumers were moving from unbranded to branded products, and were increasingly seeking out those that would boost their immunity,” says Jayen Mehta, managing director, Gujarat
Cooperative Milk Marketing Federation. Even later, as the world moved out of the pandemic, the preference for packaged foods continued.

Convenience foods, which had gained prominence during the pandemic, sustained their popularity. The widespread adoption of modern retail formats, including brick-and-mortar, e-commerce and quick commerce, proved to be further growth enablers for packaged foods. These formats facilitate the display of entire product ranges to a larger consumer base, says brand expert Devangshu Dutta, founder at Third Eyesight, and that helps.

Growing platter

Today, while Amul’s flagship product, packaged milk, is recording double-digit growth, Mehta says the company is also focusing on premiumisation by introducing artisanal cheese and products such as
Amul High Protein Buttermilk, high protein lassi and shakes, and whey protein.

ITC’s diverse launches, meanwhile, include lump-free Aashirvaad Besan, frozen breads, Dark Fantasy centre-fill cookies, and a variety of Master Chef frozen snacks such as paneer pakoda and onion rings, B
Natural fruit juices, Aashirvaad Svasti ghee, and so on.

Last year, as the focus turned to millets, and 2023 was declared International Year of Millets, the Kolkata-headquartered conglomerate saw a healthy business opportunity. It launched ITC Mission Millet with
an array of millet-based products: Sunfeast millet cookies, Aashirvaad millet mixes, YiPPee! millet-based noodles, Candyman Fantastik chocsticks with millets, and more.

“The company will continue with its focus on consumer-centric innovation and product launches across its portfolio,” says Hemant Malik, executive director, ITC. A finger on the consumer’s pulse, product research and development through ITC’s Life Sciences and Technology Centre, and an extensive omnichannel distribution infrastructure are helping the game.

PepsiCo India, too, is in the race to capture a growing share of the packaged food market. How serious the company is about this can be gauged from the fact that since 2022, its launches in the packaged food category have been the highest since it entered the food space in 1995.

It is not even two months into 2024 and PepsiCo has already launched three flavours in oats: masala magic, herby cheese, and mixed berries.

Last year, it had four launches and introduced seven new flavours in Doritos and Kurkure. And in 2022, it launched five new products and eight new flavours in Doritos, Quaker Oats and Lay’s.

In Lay’s, it went premium and launched Lay’s Gourmet.

Sravani Babu, associate director and category lead at Quaker Oats, says while the category is nascent compared to other FMCG segments, it is growing in double digits. So, the three new flavours were a
considered call.

While “basic oats continue to be the leading segment in the category,” she says, with these new flavours, the company is looking at oats as not just something one eats for breakfast. With PepsiCo keen on broadening the oats portfolio, the bowl is expected to see even more variety in the time to come.

Food in a jiffy

Quick commerce, which promises deliveries within 10 minutes, has also accelerated in-home consumption trends, said Saumya Rathor, category lead of potato chips at PepsiCo India, in an interview.

Consumer habits, she said, take decades to evolve, but the pandemic hastened that shift. So, the convenience-driven traction for packaged foods has persisted. E-commerce and quick commerce have only expanded packaged snack penetration across the country.

In response to the growing demand, PepsiCo India has announced its first food manufacturing plant in Nalbari, Assam, with an investment of Rs. 778 crore ($95 million). Scheduled to be operational in 2025,
this expansive facility spans 44.2 acres and underscores the company’s desire to make the most of the rising consumption trends in the foods sector.

Other food companies, including ITC and Amul, have also embraced an assertive stance, launching products strategically.

The trajectory indicates a promising future for India’s packaged food sector. The shelves are set to overflow.

Size of the packaged foods market: In 2022, India’s packaged food market size was $2.7 billion and it is projected to reach $3.4 billion by 2027

(According to Statista)

(Published in Business Standard)

India’s consumption landscape: Consumers acquire a taste for premium as mass market lags

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January 26, 2024

Sagar Malviya, Economic Times

Mumbai, 26 January 2024

Hindustan Unilever and United Spirits together present a study in contrasts that seemingly reinforces the current purchasing trends in India’s consumption sector. At the country’s biggest consumer-goods and alco-bev companies, respectively, premium brands are flying off the shelves, but mass-priced products remain relative stragglers.

“At the premium and luxury ends, they (consumers) are continuing to spend, continuing to experiment, continuing to do repertoire drinking, especially experimenting with the white spirits, drinking at home,” Hina Nagarajan, managing director at Diageo-controlled United Spirits, told investors in a post-earnings call. “However, Middle India, or the value-oriented consumer, is actually cutting down on the number of occasions (to spend) to manage their money.”

The maker of Johnnie Walker and Smirnoff posted a 12.4% volume decline in the mass-priced segments, while pricier prestige and above categories saw a 10% growth during the December quarter. The Indian unit of the world’s biggest distiller said it expects this trend in purchasing behaviour to continue over the next couple of quarters.

At Hindustan Unilever, the country’s biggest consumer company by both sales and market value, the story isn’t vastly different. The FMCG bellwether said its premium portfolio expanded more than two-and-a-half times the mass segment over the past few quarters.

This trend was seen even in the rural areas that make up nearly half the annual sales at the maker of Dove soaps and Glow & Lovely skin creams. Pricier products now constitute a third of Hindustan Unilever’s total sales. “In rural areas, there are people who can afford and spend money, and hence, the premium portfolio in has also grown well – like it has grown in urban parts of the business,” Rohit Jawa, managing director, Hindustan Unilever, told investors after the December-quarter earnings. “We have always seen that essential and discretionary are the two realities of (the) rural (market).”

Incomes & Business Cycles

This dichotomy in purchase decisions appears to be a function of income disparity and is market-agnostic, experts believe. For instance, rural India that accounts for nearly 40% of the overall FMCG market saw a noticeable drop in demand for a year due to inflation and erratic monsoons. Cities, meanwhile, appear to be at the vanguard of overall consumption demand across categories as urban incomes, typically linked to organised sectors of the economy, are more resilient to business cycles and promise better protection against broader inflationary pressures. “Even if the consuming class, mainly upper and middle class, saw an impact on their incomes, it is still not significant to affect their discretionary spends,” said Devangshu Dutta, founder of Third Eyesight, a strategy consulting firm. “There is a buffer available for higher income growth and it will hit them later in any economic downturn. At present, it is felt in the lower-income segment.”

Over the past decade and a half, consumer companies expanded sales by pushing both pricier and affordable products. Companies still have budget-friendly options in their portfolio, but lower incomes, especially in rural areas, appear to have dented purchasing power at the budget end of the market. “The real pressure on the wallet is on the lower side, where we do see upgrades are not happening from country liquor to either the popular category or the lower end of prestige,” said Nagarajan at United Spirits.

(Published in Economic Times)

Aditya Birla partners Christian Louboutin

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December 7, 2023

Christina Moniz, Financial Express

December 7, 2023

Aditya Birla Fashion and Retail (ABFRL) on Wednesday announced a partnership with Christian Louboutin, a designer brand known for its signature extremely high red-soled heels.

As per the terms of the deal, the current Indian business of the luxury shoemaker will be transferred into a newly-incorporated arm of ABFRL where the partners will hold equal stakes. Ashish Dikshit, MD, ABFRL, said in a statement, “This partnership… exemplifies our ambition to develop and shape the future of the luxury market in India.”

Christian Louboutin made its entry into the Indian market with its first store in Delhi in 2012 and later launched its second store in Mumbai. Announcing the JV, Alexis Mourot, Christian Louboutin Group CEO, said, “India is an extremely important market for us.”

The fact that luxury markets in Europe and even in China are seeing sluggish growth has made India a strong emerging opportunity for brands such as Christian Louboutin, note experts.

The brand, which was founded in Paris in 1991, has since diversified into categories such as handbags, accessories and beauty and is present in over 30 countries.

With this JV, ABFRL will be taking on Reliance Brands, which has partnered with global luxury brands such as Burberry, Ferragamo, Hugo Boss and Versace in India.

Devangshu Dutta, CEO of Third Eyesight, said, “For ABFRL, the ambition is to create a diverse portfolio of brands catering to a range of consumer segments.”

Having been in India for a while now, the Louboutin brand is well aware of the potential for growth in the market. One of the key factors driving growth for luxury is the rise of high net worth individuals (HNIs), which is the fastest growing anywhere in the world, say observers.

The number of ultra-high net worth individuals (UHNWIs) in India is expected to rise 58.4% in the next five years from 12,069 in 2022 to 19,119 in 2027, a report by Knight Frank said in May.

In recent years, India has also seen new luxury shopping destinations coming up in cities like Mumbai, Delhi and Chennai, but experts believe that the total addressable market and the number of luxury shopping centres are still small.

Though there is “potential”, notes Santosh Sreedhar, partner at Avalon Consulting, this segment will take a few years to really take off. “Luxury is a long-term game in India, which is why brands need to have Indian partners like Reliance and Aditya Birla with deep pockets and vision to stay committed for the long haul.” E-tailers like Tata Cliq are also enabling omnichannel growth, says Sreedhar.

With a revenue of Rs 12,418 crore, ABFRL has a strong network of 3,977 brand stores across the country. It is present across 33,535 multi-brand outlets and 6,723 points of sales in department stores across India as on March 31, 2023.

It has a repertoire of brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England, besides long-term exclusive tie-ups with global brands like Ralph Lauren, Hackett London, Ted Baker and Galeries Lafayette. Among Indian designers, ABFRL has strategic partnerships with Shantnu & Nikhil, Tarun Tahiliani, Sabyasachi and House of Masaba.

(Published in Financial Express)

A new flight plan

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November 20, 2023

Christina Moniz, Financial Express

November 20, 2023

he country’s largest airline IndiGo just announced the launch of a premium luggage range in collaboration with actor Deepika Padukone-backed lifestyle brand Mokobara. The new luggage collection, Moko 6E, offers a check-in bag and a cabin bag in the signature IndiGo blue.

IndiGo has sweetened the deal for its passengers, offering customers an extra 2 kilos of baggage allowance for one year after purchase at no additional cost. With a starting price of Rs 9,999 and a six-year warranty, IndiGo says it is looking to reach more discerning consumers who travel for business or leisure.

The airline already enjoys a substantial share of over 60% in India’s domestic civil aviation sector as per DGCA data. So why is it making its way into the Rs 50,000-crore luggage market in the country? According to an IndiGo spokesperson, the aim is to leverage the carrier’s strong brand presence to target modern Indian jet setters and create a seamless travel experience.

Vejay Anand, CEO, Ironhill India, points out that balancing creating a new identity for the luggage line while leveraging the well-established airline image without diluting its core values will be a delicate task. “This venture was more than a market expansion; it was about intertwining their brand heritage with travellers’ lives, ensuring passengers carry the airline’s reliability beyond flights,” he remarks.

Navigating the market

Although the luggage market is huge in the country, industry reports estimate that the organised and branded segment is around 40% with players like VIP Industries and Samsonite taking up the lion’s share. Devangshu Dutta, CEO of Third Eyesight notes that rather than the potential quantum of business, it is more relevant to see a brand collaboration such as this as helping both companies create a buzz in the market. He observes that there is some degree of resonance in the design philosophies of both brands, pitched largely to millennial consumers.

Ambika Sharma, founder & MD of creative digital agency Pulp Strategy, observes that the carrier’s decision to enter the luggage segment could offer several advantages for IndiGo the brand. “Expanding into luggage provides IndiGo an opportunity to showcase its brand beyond the airline industry, strengthening its overall brand image and positioning it as a lifestyle brand. Offering a branded luggage line can enhance customer loyalty and engagement by providing travellers with a convenient and consistent travel experience,” says Sharma.

She however adds that making a mark in a competitive market with established players will be a challenge for the company. She cautions, “Consumers may not immediately associate IndiGo as a luggage brand, requiring significant marketing efforts to establish brand recognition. Creating a unique selling proposition that distinguishes the Moko 6E luggage from competitors is crucial. Effectively managing logistics and supply chains is critical to ensure timely product delivery and customer satisfaction.”

That said, India is a predominantly price-sensitive market where prominent brands sell luggage for as low as Rs 1,999, the brand may eventually have to revisit its pricing strategy if it has to compete with established players. “By offering a range of pricing options, IndiGo could cater to a wider set of consumers, potentially appealing to different market segments. This would ensure a more comprehensive market penetration while retaining its premium positioning,” states brand expert Anand.

With this association, the collaborator brand, three-year-old Mokobora, a premium travel and lifestyle brand established as recently as 2020, could also get a leg-up in terms of both visibility and accessibility. Anand notes that the lifestyle brand will, through this collaboration, be able to reach out to an audience of about 3 lakh or more air travellers in the country every day.

As of October this year, IndiGo has over 2,000 scheduled daily flights which include cargo operations, as well as CAPF and Army charters, allowing Moko 6E to reach a significant number of travellers daily.

(Published in Financial Express)