Interview with Vikram Mahaldar

Vikram Mahaldar
VP & Global Sales Head
OCM Pvt Ltd

In global markets, Indian companies have to start selling brands, rather than commodities

OCM is one of India's largest fabric manufacturers. In the wake of new business opportunities and growth, OCM caters to modern Indian customers by offering high quality ready-to-wear garments for men and women. Vikram Mahaldar, VP & Global Sales Head, OCM, talks about opportunities and challenges for Indian textile companies.

Has demonetisation impacted the Indian textile industry?

Demonetisation led to a pronounced contraction in demand. Since the majority of the supply chain operates through cash, the imminent dip in demand had a serious impact on labour, production capacity and trade of both wholesalers and retailers.

Retail sales collapsed in November and December. Slower consumer spending affected premium products the worst -- products that were always in high demand during the marriage and festive seasons.

However, there has been improvement since January, and markets are back on track. A cleaner economy inherently provides scope for growth, and we believe the next fiscal year should be amongst the best for organised players.

Social media is one of the fastest ways of brand recognition. Are Indian textile brands using it intelligently?

The intent of social media is to build awareness and generate engagement. It is a battleground. In the Indian sub-context, there is a wellspring of companies in the fashion/apparel/e-commerce space that are in overdrive. They not just compete with each other but also with offline retail channels.

In the textile space, companies are not just ramping up websites, they are investing in social media platforms to reach their audience whether through crowd sourcing or choosing other 'vanity metrics' to measure their success rate. Of course, all companies are veering towards e-commerce and discounting, in an effort to drive purchase intent.

Do you think OCM is using social media fully?

For OCM, focus has been two-fold. We believe in building traction through a set of loyalists for the brand/s and in gaining our share of a voice. To catalyse both, we are establishing our presence in e-retailing and are focused on an integrated marketing communication to build awareness within our target audience.

Our strategy is largely visual and does not just push the product. We try and tell stories to appeal to the customer. I am happy to say that our bid to keep pace with the discerning online consumer has paid off and we are making good progress on the recently launched shopatimpressions.com.

What would be your suggestions to improve the overall market share of Indian textile companies in the domestic and global markets?

There is the onset of the churn that everyone has to grapple with. Conventional wisdom says that market share drives profitability. But it is also important to assess the profitability of the category.

To up overall growth, product extensions, channel expansions, consistent innovation and service enhancement are the key. It is a foolproof way to build customer equity and sustain growth in the domestic market.

Rather than falling prey to putting all energy in competing in the same space to take maximum share, market leaders need to focus on product categories and market segments that are not catered by organised players. These distinct segments have seen vast growth in last few years.

In global markets, we have to start selling brands rather than commodities if we want to make our presence felt. It would be prudent to start with markets like Iran, the Middle East, Malaysia and Indonesia before expanding to regions where product/brand/price synergies may not work for us as yet. New markets like South Africa and Australia should be explored by commodity suppliers who primarily supply to the United States of America and Europe to seek growth.

With consumerism and disposable income on the rise, the Indian retail sector has experienced a rapid growth in the past decade of several international players like Marks & Spencer, Guess and Next. What are your thoughts on this?

It is a booming market and the entrant of foreign players is inevitable. The advent of these entrants has only upped product innovation and distribution strategies for domestic players.

In terms of quality, technology, performance and efficacy, both Indian and global entrants are on par. It is the perceived value of the product co-factored with changing consumer lifestyles that is making the difference.

However, this proliferation is limited to a niche audience. They may not be able to cater to the local needs of diverse geographies. That is where our expertise lies.

GST will be announced in the near future. Will it be a game changer for the textile business in India?

If GST is imposed, mills and buyers will have to pay extra money for fabrics made from natural fibre, as they are exempt from any taxes in most part of the country. That may lead to short term decline in demand till channel stocks last, and until customers accept the change.

However segments like synthetic fabrics, the price increase can be offset, to an extent, with lower cost of inputs, which are taxed.

For mills that plan to modernize and invest in capital expansion, they may wait for GST to be implemented before they take the plunge.

As multiple channels are more prevalent, how is OCM brand taking an edge in that?

OCM, has historically had a strong presence in multi-brand retail outlets. We have further strengthened that to 2,000 retail points and 60 wholesalers. Most importantly, we have opened five new exclusive brand outlets this year to cater to the end-customer and promote our fabrics and garments. The plan is to ramp this up to 25 stores by end of FY 2018-19.To service all these networks, we have come up with a ready-to-wear range for both men and women. We present a range of jackets, sweaters, party shirts and t-shirts for men, and ethnic wear and sweaters for women - and this is just the start.

To keep pace with the discerning online consumer, shopatimpressions.comhas been launched. This is over and above being present through partners at multi-brand e-commerce portals.

Export markets are becoming environmentally conscious. How is OCM integrating this in its manufacturing processes?

OCM is committed to a green environment, not just for being able to sell products in a certain market, but as a social responsibility.

We are an EMS Certified Company and over the past three years, we have heavily invested in upgrading our Effluent Treatment Plant from chemical base to bio base. This is a process where optimum bacterial growth is ensured to neutralise chemicals. This ensures that cleaner water complying with industry norms is generated.

We recycle soft waste to produce fashion fabrics that are in vogue. As part of our green practice, we do not use any dyes and chemicals like azo dyes that are banned internationally.

Published on: 15/05/2017

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.