Prime Source Forum (Hong Kong) has become the ‘must attend’ annual event for the apparel industry, offering senior executives from all over the world the chance to meet and discuss current challenges and opportunities with their peers, providing also a meeting place where competitors speak freely to each other in the knowledge that many major issues can be resolved only through mutual understanding and common solutions. More than 50 senior executives from 14 countries will lead the discussions ranging over the challenges and opportunities confronting the industry in today’s changing economic and political environment.

The event will be prefaced on 31 March with industry workshops.

The main event will be opened by the Keynote address – “The World May Be Flat But the Terrain is Rough: Global Sourcing in The Next Three Years” – by Dr William Fung, Group Managing Director, Li & Fung Limited.

Devangshu Dutta, chief executive of Third Eyesight, will be moderating the panel on the emergence of brands as retailers in their own right, and the change this is creating in developed and developing markets. The panel will include

• Shuman Chatterjee, CEO, Levi Strauss (India) Pvt Ltd

• Edward A Gribbin, President, Alvanon Consulting Group, Alvanon, Inc

• So Hee Kim, Editor in Chief, Malcom Bridge, Korea

• Carlo Rivetti, Member of the Board of SMI-ATI, President, Sportswear Company, Italy

• Fernando Urrea, President, Leonisa S.A., Columbia

• Fritz Winans, Senior Vice President – Corporate, Global Manufacturing/ Sourcing, Liz Claiborne Inc

Devangshu Dutta will also deliver the closing summary at the event.

For more details on the event, including registration information, please visit the event website: http://www.primesourceforum.com/

“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”
– Bill Drayton, CEO, chair and founder of Ashoka, a global nonprofit organization devoted to developing the profession of social entrepreneurship

One of the exciting by-products of the increased awareness and practice of corporate social responsibility has been the emergence and growth of social entrepreneurship as a serious social and ‘business’ trend in the last two decades. The potential of successfully marrying the competencies of business generating sources and markets, with solutions to social and environment issues is the main principle that underlies the concept of successful social entrepreneurship.

Today’s social entrepreneur is a dynamic, committed and driven individual who is able to identify sustainable solutions to social problems. He uses earned income strategies to pursue a social objective, and the outcome is directly connected to his commitment to resolve the social or environmental malaise he chooses to address through this enterprise. The profitability of a social entrepreneurship is driven by both financial and social returns, with the financial returns being redeployed into the enterprise to further its growth and sustain the ‘business’.

The future of permanent and lasting social change lies in the ability of these social enterprises becoming independent and self sustaining, moving away from philanthropy and becoming financially independent.

Modern day social entrepreneurship therefore, is actually about sustaining social change and growth through self-sufficiency instead of charitable contributions and government grants and subsidies.

In several conversations recently, there has been reference to how much contribution comes from small-medium enterprises, the need to protect the small-scale industry (SSI) to provide diversity etc.

After all the conversations, one thought keeps coming to mind. While small businesses need to be enabled, and an ecosystem and environment created for them to thrive, there is no reason to keep them from growing.

Entrepreneurship is organic, a business is a living thing. Basic high-school biology teaches us that living things (as opposed to non-living things) grow. Preventing a living thing from growing is going against its very nature.

But that is exactly what reservation of certain manufacturing sectors for small scale does – it creates a government-regulated ceiling beyond which the business cannot invest (and, therefore, cannot grow).

The apparent objective of the policy is to “protect” the industry sector from competition from large companies. The underlying assumption is that large companies compete unfairly, and that small companies in the reserved sectors effectively cannot compete against larger players.

However, many industries and sectors in India are paying the price for that policy. For instance, even after the clothing sector was allowed a higher cap of investment in plant & machinery, and then finally removed from the list of SSI-reserved list, it struggles with its fragmented structure, against larger-scale and more efficient competitors based in China , neighbouring Bangladesh and other countries.

Obviously, in global trade, restricting the growth of domestic industry does nothing to make the country competitive. It only protects it from itself, and makes it inefficient.

So every time the list of industries reserved for small scale is reduced, in my opinion it improves the potential competitiveness of Indian industry. In that light, the government’s announcement this week of removing some more industries from the list is an occasion to cheer.

The government has identified mechanical equipment, electrical goods and stationery as the categories to be opened to larger scale manufacturing.

Consumers, retailers and consumer products brands have something to look forward to, considering that this may include products such as steel cupboards, doors, windows and ventilators, steel furniture, locks, steel and aluminium utensils, builders’ hardware, sewing machines, kitchen gadgets, and pens.

We await the final list with bated breath. And look forward to other consumer goods also being removed from the SSI-reserved list and being opened to higher investments.

Even in these enlightened marketing times, many people believe that the brand is the name. They believe that once you advertise a name widely and loudly enough, a brand can be created. Nothing could be further from the truth.

High-decibel advertising only informs customers of the name, it cannot create a brand.

If we put ourselves in the customer’s shoes, a brand is an image, comprising of a bundle of promises on the company’s part and expectations on the customer’s part, which have been met. When promises are delivered, when expectations are met, the brand develops an attribute that it is defined by.

The promise may be of edgy design (think Apple), and the customer expects that – when the brand delivers on the promise and meets the expectation the brand image gets re-affirmed and strengthened.

However, these attributes are not always necessarily all “positive” in the traditional sense. For instance, a company’s promise may be to be low-cost and low-service (think Ikea, or “low-cost airlines”), and the customer may expect that and be happy with that when the company delivers on that promise.

The promise may be products with a conscience (think The Body Shop), which may strike a chord with the consumer.What that brand actually stands for can only be created experientially.

Creating this image, creation of the brand, is a complex and step-by-step process that takes place over time and over many transactions. Repetition of the same kind of experience strengthens the brand.

The brand touches everything that defines the customer’s experience – the product design and packaging, the retail store it is sold in, the service it is sold with, the after-sales interaction – all have a role to play in the creation of the brand.

For instance, to some it may sound silly that market research or how supply chain practices can help define a brand, but that is exactly how the state of affairs is for Zara. Changeovers and new fashions being quickly available are what that brand is about, and it would be impossible for Zara to deliver on that promise without leading edge supply chains, or a wide variety of trend research.

Similarly, it may sound clichéd that your salesperson defines the brand to the consumer, but even with the best products, extensive advertising, and swanky stores, for service-oriented retailers everything would fall apart if the salesperson is not up to the mark. This is indeed a sad reality faced by so many of the so-called premium and luxury brands.

Of course, brand images can be changed or updated, but the new image also needs to be reinforced through repeated action, a process just like the first time the brand was created.

(Extracted from the article “Brand Immortality and Reincarnation“)

Fashion is, by definition, perishable. Like, bread, eggs and milk. Or is it?

When bread turns stale, eggs turn rotten or milk turns rancid, you do have to throw it away. Fashion is different, because its perishability is artificial, driven by popular perception that something is “out-of-date” or that something else is “the look of the day”. You don’t really have to throw that blue peasant skirt out in the garbage or in the Salvation Army bin…but you do anyway, because it is so yesterday…or that’s what everyone else is saying.

Earlier, perceptions took time to spread, today they can be spread instantaneously through the web, TV and cell phones, and pretty quickly, even through slow media like print magazines.

So ‘Fast Fashion’ is really a product of fast media and communications technologies.

Having said that, it is here to stay, and regular (mainstream) slow-coaches do need to be worried about customers being seduced away by the ever-fresh look of a Chico’s or a Zara.

I can’t even begin to estimate the millions of dollars that must have been spent on “studying the Zara model”. However, while Zara’s model seems to scream “best practice” and everyone wants to emulate it – is it really for everyone?

Inditex (Zara’s parent company) has grown over 40+ years of evolution, in a specific market and business context. It may have “exploded” on the global scene when it floated its IPO in 2001, but the business model has been brewing a long time.

It has such significant investments in production that Inditex is as much a manufacturer as a retailer. Its people and process model almost diametrically opposite the command and control, “buying director – driven” model of other retailers. Its technology investments are focused better than most of its peers. (See case study and presentation)

Would your company’s DNA allow you to invest in and manage fabric and apparel manufacturing? Would it allow young people to be sent out to take bigger-ticket purchase decisions with fewer approvals than they do now? Would your design team really trust your frontline store staff with feeding them relevant trend information every day?

And yet, and yet…As labour costs rise in Europe, Zara is also being forced to rethink its model of local or regional production. As it does move more production to places like India and China, the big question is whether it can maintain the sanctity of its business model.

I won’t advise other retailers to breathe easy, but they don’t need to roll over and die just yet.