There is a buzz in the retail industry, this buzz is created by lots of
Indian and foreign manufacturers who want to have their retail presence in India especially by way of launching a new apparel brand. Here are some of the
issues they need to address while launching a new apparel brand:
most important part is the positioning in the Indian consumer mind-space. Smart
casual positions are taken in by the brand such as ColorPlus, Dockers and
Canary Blue. Design wear are gone with square-1 mall and Kimaya, Kazo and
individual designer having their stand alone store. Any positioning below that
is lapped up by Zillions of manufacturers. Sports category is gone, with
Adidas, Puma and Nike. Does it spell dooms day for the new entrants? Not necessarily,
there are still wide open gaps which lie agape between these broad categories
and one should start considering those to enter.
location is the key to the positioning, it determines and in turns reinforces
positioning; in fact, with about 50% of the operational expenses are taken up
by the rentals, it has assumed an even more important position. Its a
strategic and vital decision, which can make or mar an apparel brand.
Buying vs. Manufacturing:
is again a very important decision as about 35% of the expenses in a retail
operation are taken up by the cost of merchandise. It is even more important
for the foreign manufactures as Indian size set is radically different from
that elsewhere, say US. There are innumerable problems of fits especially in
western women's wear. Then there is that Indian touch and taste with which even
the hot selling merchandise in the western country is rejected by the Indian
consumer. If one is manufacturing oneself, one can control the quality and
expense, which is not, so if one is buying.
is said that only thing works for Indian consumers is the price-quality equation. Though this statement is a bit exaggerated, nevertheless, price is a very important criterion in the Indian consumer's mind. It denotes the quality, the
status or even the worth of consumer for himself/herself or the loved one. So
positioning, price and location should reinforce each other to justify the
consumer that particular worth.
a moot point whether a brand should be pitched as a foreign brand or an Indian
brand. There are brands for example Coutons which even when they use Discounts
as their selling strategy, use foreign models in their advertisements to
reinstate the quality perceptions in the consumer's mind. In general, pitching
a brand as a foreign brand (esp. European) evokes a sense of heightened quality
in the consumer's mind and justifies the price premium. But of course, and
needless to say, promotion should be backed by positioning, store experience, product performance and prices. Its important also, as just giving one insertion per page per
month in the four premier fashion magazines in India can easily consume upto
Rs. 1 cr.
has been written about discounts in India, unlike elsewhere discounts pull the
greatest of crowds. So one can say that fashion doesnt attract so much an
average Indian as discounts. In India, discounts hit the mind. At the same time
they take away a part of brand equity. Proper strategies should be made
regarding the timing, assortment and promotion for discounts.
Uncertainty about Indian Retail/Mall Boom:
India is still in a transition phase as
regards the buying habits of the people, even in Metro cities. One is not sure
of the success of the retail infrastructure that is developed for the
envisioned retail boom. Rentals are the biggest cause of worries as they take
away a substantial part of the profits. Looking at all this, a promoter needs to be cautious about the viability of launching an apparel brand.
policies are the biggest external factor in the success of a retail brand.
Right from allowing the entry of the single brand FDI in India to the Taxes collected out of the profits are a function of the government.
Unfortunately presence of leftist faction in the centre will raise doubts about
government allowing liberal measures for the success of retail brand. There are
also underhand dealings from incorporation of the company to customs clearance
of the items imported. All these things should be taken in to consideration
while launching the brand.