Wednesday, December 29, 2010

Overview of Lingerie Market in India

Overview of the Indian Innerwear Industry

The overall innerwear market (excluding kids) in India was worth Rs. 1,191,300 lacs in CY 2009. It has grown at a Compounded Annual Growth Rate (CAGR) of 15.8 % over the last four years. The growth can be attributed to the rising disposable incomes, growing consumer class and advent of international brands in the Indian markets.

In volume terms, the men’s innerwear market constitutes 48 % of the total innerwear market in India. The share has remained range bound over the last four years. The women lingerie segment holds a 52 % share. In value terms, the women lingerie segment enjoys 66 % share of the total lingerie market. Larger value share and a smaller volume share depict higher Average Selling Price (ASP) as compared to the men’s innerwear market.

 In value terms the lingerie industry in India was worth Rs 7, 89,700 Lacs in CY2009. It has grown at a robust 16.8 % over the last four years (2006-09). The growth can be attributed to the rising disposable income and growing preference for lifestyle products. Over the last decade lingerie has grown from an optional part of the wardrobe to essential clothing for women. It constituted 5.1 % of the total Indian apparel market and 15.8 % of the overall women apparel market during 2009. In volume terms the lingerie industry grew at a rate of 9.4 % over the last four years. The lingerie sales grew from 4,980 Lacs pieces in 2006 to 6,520 Lacs pieces in 2009. In volume terms it constitutes 9.4 % of the overall apparel market and 31.9 % of the women apparel market.

The lingerie market grew at a faster pace in terms of value as compared to volumes during the 2006-2009 period. This signifies a jump in the average selling price which grew from ` 100 in 2006 to `121 in 2009. It grew at a Compounded Annual Growth Rate (CAGR) of 6.7 % during the same period.

The lingerie industry in India is characterized by a high degree of fragmentation with almost two-third of the market controlled by the unbranded and unorganized regional players and the balance one-third share goes to the few big organized and branded players. The advent of some international brands in the Indian market place has brought about some realignment in the fragmented lingerie market. The companies have started advertising boldly through advertisements, fashion shows etc., to catch up with the consumers to understand their preferences.

Segment-wise lingerie market - The lingerie market in India can be divided into five segments based on the price points at which they sell in the market. They are classified in super-premium, premium, mid-market and economy & low-market segment. Approximately, 75 % of the market share is held by the mid-market and economy segment, in both, value and volume terms. The super-premium and premium segments are relatively smaller but fast-growing segments. In volume terms, the economy segment accounts for the maximum share in the lingerie market. The volume-wise share of different segments has remained more or less stable over the last four years. All segments except the low market segment have grown in the volume terms over the last four years. The maximum growth in volume terms was experienced by the super-premium segment followed by the premium segment. This indicates the growing penetration level in these segments. The super-premium and premium segments grew at a CAGR of 18.9 and 16.6 % respectively. This can be attributed to the surge in international brands entering India, rising income levels, changing demographics, growing brand awareness and the willingness amongst the people to spend on lifestyle products. The key brands in the premium and super-premium category are Marks & Spencer, Triumph, Enamor, Lovable and La Senza. The key brands in the economy and mid-segment are Groversons, Body, Bodyline, Daisy Dee and Teenager.

In value terms, the mid-market segment is the largest followed by economy and super-premium and premium segments. Low market constitutes only 6.5 % of the total lingerie market. Approximately, 78 % of the market share is held by the mid-market and economy segments. This segment is majorly dominated by unbranded regional players. Therefore, there lies immense potential for the market participants to launch products in these categories to grab the market share and create a better brand recall.

The average selling price (ASP) of lingerie in India varies from Rs. 37 per piece to Rs.1, 029 per piece. The ASP of the super-premium segment has grown at the fastest pace followed by the premium segment. The ASP in the super- premium and premium segment grew at a CAGR of 14.5 % and 8.9 %, respectively, over the last four years. This kind of a growth can be attributed to the entry of global brands in India, rising percentage of organised retail and the rising brand consciousness amongst the consumers. The growth in the ASP of the lower segment remained at a meager 2.9 %. This indicates that the lower segment is a price-sensitive market. The ASP in the mid-market and economy segment grew at 5.2 % and 4 % respectively.

The brand loyalty factor is the highest amongst the premium and super-premium categories. It decreases as we move down the ladder. According to Images Business of Fashion Magazine, October 2009 issue, Lovable is amongst the top three preferred brands in women’s innerwear in India.

The lingerie industry in India is expected to grow at a CAGR of 18.3 % over the period 2009-2014. It is currently estimated at Rs. 7,89,800 Lacs and is expected to be worth Rs. 18,32,460 Lacs in 2014. This growth would be led by the super-premium, premium and mid-market segment.

The super-premium and premium segment contributed 15.8 % to the total lingerie market in 2009. This share is expected to grow to approximately 28 % by 2014. This can primarily be attributed to the advent of international brands in India, growing brand awareness and brand loyalty amongst the Indian consumer. Mid-market segment is the largest segment of the lingerie market and is expected to remain the largest over the next five years. It currently contributes 43 % (2009) to the total lingerie market. This share is expected to increase to 46.3 % in 2014. This segment is expected to grow at a CAGR of approximately 20 % over the next five years. The growth in this segment can be attributed to the growing urbanization and increasing number of working women. On the other hand, the economy and low segments are expected to grow at a pace slower than the overall lingerie market, thereby, losing its share in the overall pie.

The key factors influencing the choice of the consumers are comfort, price, brand and durability. Comfort plays a key role in the choice of the consumers followed by price and brand name.

Consumer Preferences Size is the most crucial component in the lingerie market. The best selling size is 90 cm followed by 85 cm. In brassieres type, regular full cup are more in demand, followed by the seamless and strapless bra categories. Colour- wise, white seems to be in more demand followed by pink, black and peach. When it comes to fabric, sales are led by cotton brassieres followed by cotton lace and cotton Lycra.


 View Full Report Here

Overview of Men’s apparel Category in India

Overview of Men’s apparel Category in India



The domestic Indian apparel market can be divided into three segments, Men’s apparel; Women’s apparel; and Kids' apparel (including uniforms).



Mens apparel is the largest segment of the domestic Indian apparel market, with a 41.5% market share. The level of penetration of organized manufacturers and brands is the most in this segment of the market. The size of the men's apparel segment is expected to grow at a rate of 6.8% from 2010 to 2015, and will continue to enjoy the largest share in the domestic apparel market.


At the wholesale level,  Research expects, the domestic apparel market to grow from Rs. 1,250 billion in 2009 to Rs. 1,800 billion in 2015, a CAGR of 7.6%. Men’s apparel, the largest segment, is expected to grow at a CAGR of 6.8%, from Rs. 519 billion in 2010 to Rs. 720 billion in 2015.


At the retail level, the growth rates are expected to be much higher at 14% – 15% per annum. According to  Research, retail purchase of apparel is expected to double from Rs. 2,000 billion in 2010 to approximately Rs. 4,000 billion by 2015, a CAGR of approximately 15%. Retail spending on women’s wear is expected to grow at higher rate.



Menswear

According to  Research, mens apparel is the largest segment in the Indian apparel market.  Research estimates the market size at Rs. 519 billion in 2010 and it is expected to grow at a CAGR of 6.8% to Rs. 720 billion in 2015. The level of penetration of organized manufacturers and brands is the most in this segment of the domestic apparel market. Shirts, trousers and suits contribute almost 71.2% to the domestic apparel market and these segments are expected to maintain their market share in the future. The T-shirts market is expected to experience the highest growth over the next 5 years. Other mens garments include casual and leather jackets, nightwear, woolens and dhotis/lungis. Brand loyalty factor is high amongst the menswear segment, especially in the premium and super premium segment.


Men’s shirts

 Research valued the market in men’s shirts at Rs. 191 billion in 2010. Mens shirts, as a single product category, commands the largest market share (36.8%) in the menswear segment with the greatest number of manufacturers and brands competing in the market. This market is expected to grow at a CAGR of 6.4% over the next five years, and is projected to be worth Rs. 261 billion in 2015. The growth in this product category at the retail level is expected to be at a CAGR of 13% from Rs. 420 billion in 2010 to Rs. 770 billion in 2015. Growth can be attributed to the increased penetration of ready-to-wear shirts in the market place, especially in the rural markets, rising income levels and the easy availability of ready-to-wear shirts in various colors, sizes and patterns at malls and local garment retailers.


The market for mens shirts can be divided into various categories by price point. Rising income levels, increasing eagerness to buy and the popularization of formal wear at the workplace is driving growth in the super premium, premium and medium shirts category. The highest growth is expected in the super premium category, followed by the premium category. This can also be attributed to the introduction of more domestic and international brands in these categories.


Men’s Trousers


The trousers category is the second largest category in mens apparel, accounting for 25.7% of the menswear apparel market. The trousers market is expected to grow at a CAGR of 7.1% from Rs. 133 billion in 2010 to Rs. 188 billion in 2015. At present, retail penetration in the mens trousers category is not as high as for mens shirts. However, this is changing, with a growing preference for ready-to-wear trousers on the demand side and the availability of ready-to-wear trousers in various brands, sizes, colors, designs and fabrics on supply side. Growth in this product category at the retail level is expected to be at a CAGR of 14% from Rs. 319 billion in 2010 to Rs. 633 billion in 2015.


The low priced trouser segment (below Rs. 300) contributed 50% of total trouser sales in 2009. The share of low priced trousers is expected to fall to 45% in 2014 due to an increase in per capita disposable income, enabling buyers to graduate to higher price point categories. The greatest growth has been observed in the premium and super premium categories during the period from 2006 to 2009. These two categories collectively accounted for a 23.9% share in 2009. This share is expected to grow to 28% in 2014. The products in this segment mainly sell through organized retail especially exclusive brand outlets (Raymonds, Reid & Taylor, Cottons) and multi brand outlets (Shoppers Stop, Pantaloons, Lifestyle). Growth in these categories will primarily be driven by the easy availability of luxury brands, rising levels of brand consciousness and formal wear culture at the workplace.


Men’s Formal Suits


The current market size of the formal suits, jackets and blazers segment is estimated at Rs. 45 billion. This segment is expected to grow at a CAGR of 7% over the next five years, with a projected worth of Rs. 63 billion in 2015. This growth can be attributed to the rapid shift from tailored to ready-to-wear suits, rising disposable income, the growing service sector and the influence of multinational corporations. Growth in this product category at the retail level is expected to be at a CAGR of 14% from Rs. 319 billion in 2010 to Rs. 633 billion in 2015.


Lowest price suits contributed 82% to total suit sales in 2009 in value terms. This segment is expected to shrink over the years as more people graduate to the relatively costlier economy and medium segments. The premium segment is expected to see a growth in its share from 4.8% in 2009 to 6% in 2014. The increase in this category can be attributed to the increasing preference of executives to wear formal attire at office meetings. The premium and super premium category is expected to grow from a 10.5% market share in 2009 to 11.2% in 2014. This would primarily be driven by an increasing number of foreign brands entering into India, rising income levels, increases in the size of the working population and rising brand consciousness amongst the Indian youth. According to  Research estimates, Reid & Taylor holds a market share of 7.5% in the premium suiting segment.


Worsted Fabrics

Worsted fabric is a blended form of fabric in which one of the components is wool. The wool can be blended with both, man-made or cotton fiber to form a worsted fabric.



According to  Research estimates based on industry interactions, 45 million meters of worsted fabric were produced in 2009. There have been minimal additions over the past five years. The industry is expected to produce 52 million meters of worsted fabric in 2014. This projected growth can be attributed to the rising income levels, reductions in the price gap with competing fabrics and increasing preference for wool blended fabric among Indian consumers due to its grace and style. The average price for worsted fabric is approximately Rs.450 per meter and it operates primarily in the premium, super premium and luxury segment. The industry has a total installed capacity of 0.604 million spindles as of 2009. Major players in the worsted fabric business are Raymond, Reid and Taylor, Digjam, Dinesh, OCM and Vimal. Though Raymond is the market leader in the worsted fabric business, Reid and Taylor has managed to increase its market share over the last few years.



Read Complete report Here






Saturday, December 25, 2010

Overview of Apparel and Textile Industry -2010

In 2009, world apparel production stood at US$140 billion, with 71% of production accounted for by Asian countries. The developed nations/regions such as US and European Union (“EU”) accounted for 11% and 14% of global production respectively. Being a matured industry, growth rate of the Global Textile and Apparel industry is in sync with the growth rate in global GDP. Of the total apparel retail market valued at approximately US$500 billion in 2009, the developed nations/regions like US and EU accounted for 33% and 30% respectively.

The Indian textile and apparel industry is estimated to be worth Rs. 2,700 billion in fiscal year 2010. It has been estimated on the basis of industry interactions. Approximately 65% of the total textile and apparel production (wholesale price level) is consumed domestically. India’s domestic textiles and apparel consumption is estimated at Rs. 1,750 billion (wholesale price level), of which apparels account for approximately 71%. India exported US$20 billion worth of textiles and apparel of which 45% are apparel exports.

The textile and apparel industry is one of the largest and the most important sectors in the Indian economy in terms of output, foreign exchange earnings and employment. It contributes approximately 14% to India‟s industrial production, 4% to the country‟s GDP and 17% to the country’s export earnings. It provides direct employment to over 35 million people and is the second largest provider of employment after the agricultural sector. Thus the development of this sector has an overall impact on the economy. The Indian textile and apparel industry contributes approximately 4% to the global textile and apparel market. Since the textile industry has such economic importance, it has always attracted the Government’s attention. Therefore, the Government has introduced policies such as the Technology Upgradation Fund Scheme (“TUFS”), Scheme for Integrated Textile Parks (“SITP”), low excise duty, high import duty (to discourage imports) and National Textile Policy to develop the textile sector.

Indian Apparel Industry

Estimates say (based on industry interactions) that the Indian apparel market grew at a CAGR of 6.5% from Rs. 1,225 billion in fiscal year 2005 to Rs. 1,675 billion in fiscal year 2010 (wholesale level). The Indian apparel market comprises domestic apparel consumption and exports. The domestic market is estimated to be worth Rs. 1,250 billion in fiscal year 2010 (at wholesale level). Spending on domestic retail apparel has grown at a high rate of approximately 13–14%. The apparel market size at the retail level is estimated at Rs. 2,000 billion in fiscal year 2010. The retail purchases on apparels is expected to double to approximately Rs. 4,000 billion by fiscal year 2015, a CAGR of approximately 15%. Factors expected to contribute to the growth of the Indian apparel industry include:

Ø Rising levels of disposable income;

Ø Growing preference for ready-to-wear apparels;

Ø Increasing penetration of organised retail;

Ø Changing consumer habits;

Ø Increasing trend towards urbanization; and

Ø A comparatively younger populace.

Source: sebi.gov.in

Friday, July 9, 2010

Fashion Designing as a Career Option

Fashion Designing is a career which is rapidly booming, thanks to the meteoric rise of organized retail in India. In this context, it is worthwhile to start considering seriously Fashion Design as a career if you are a  fresh graduate. It is glamorous as well as require hard work. It is highly creative. One can start his career as a merchandiser, designer or freelance writer. Compared to other sectors, it is highly specialized, niche oriented and hence it becomes exponentially paying as the experience progresses...Read More

Sunday, July 4, 2010

Fabric Knowledge for MFM Students and Design Professionals

"Fabric Knowledge" is one of the most dreaded subjects among MFM students who are not from textile background. At the same it one of the most important subjects. 70% of Fashion in the world comprises of apparels and hence to know your category means that you must have a knowledge that comprises of that category.

Here is a resource that you will always find handy if you are working as professional or student. Take a printout of it and use it as a handbook for fabric. Alternatively you can download it from here.

Of course, if you want to delve deeper, please go to the blog http://mytextilenotes.blogspot.com

Wednesday, June 30, 2010

Report on Skill requirements and Skill Gap in Organised Retail in India

This report from NSDC talks about the need and requirement of various human resources in organised retail in India. Broadly it has the following organisation


1. Environment Scanning and Competitiveness of Organised Retail

1.2. Industry size and Growth
1.3. Demand Drivers
1.4. Key Success Factors and Risk Factors

2. Human Resource and Skill Requirements in the Organised Retail Industry

2.1. Overview of Employment in Organised Retail
2.2. Skill requirements and skill gaps in Store Operations
2.3. Skill requirements and skill gaps in Merchandising
2.4. Skill requirements and skill gaps in Purchase
2.5. Skill requirements and skill gaps in Logistics
2.6. Skill requirements and skill gaps in Marketing
2.7. Skill requirements unique to different segments and formats in Organised Retail
2.8. Current Training/Education Infrastructure
2.9. Approach towards new Skill building initiatives
2.10. Regions which will drive human resource requirements
2.11. Projected Industry Size and Human Resource Requirement

In short, it is very useful resource for retailers, planners and general industry.


One can download it from here.

Sunday, June 20, 2010

Should you do MFM if you are a fashion designer

MFM for Fashion Designers

This is what a reader has written to me:

A friend of mine is a B. Des. from NIFT. She has also cleared MFM exam She is a little confused as to whether to join the NIFT MFM or not. Can you throw some light on what her career path could be if she continues as a designer vs if she does the MFM course. As she already has a bachelor's degree from NIFT, some people have suggested that MFM might be a waste. But we are not sure. Hope you could help ?

The basic question is should you do MFM if you are a fashion designer.

My answer is-yes. Whereas having a degree in Fashion Design prepares you for the product, it is the MFM degree that prepares you to present the product profitably to the market. Just have a look at the subjects of the MFM and you would realize immediately that the course is designed to offer the product in a corporate set up. Thus there are subjects related to general management- Marketing, Finance, Human Resource- that help you to set up and work in an industrial set up with the agreed upon principles. The courses related to product such as Pattern Appreciation, Merchandising, Supply Chain and Fabric knowledge will present the product from the point of view of logistics from the concept to the customer. Then there are specialized courses such as brand management, advertising management, visual merchandising and International marketing which give you an in-depth knowledge of the way companies operate. And finally, courses in retail management, Customer relationship management and MIS will prepare you to operate in an sales environment. The most important of all is the knowledge that you gain from experts and seniors in the field.

In short being an MFM with a fashion designing degree is a double benefit. Often, designers are not very good in number crunching and a degree in MFM prepares you to face the marketing, finance and brand managers fearlessly and with the knowledge of products at the back of your hand, can make you a formidable personal force to reckon with. I have personally seen people with these dual degrees who are way above in the hierarchy than those with only a fashion design degree or with a fashion management (MFM) degree alone.  

Thursday, June 17, 2010

Elibility and Entrance Procedure for NIFT MFM

Hello Sir, Presently I m doing graduation and this is my last year so i want to go for NIFT MFM so can you please tell the eligibility and entrance procedure?

This is a question very commonly asked by the students. Here is my way of looking at it:

Eligibility: Any graduate is eligible. For details you can log on to the NIFT website and find the details.

Entrance Procedure: A student needs to clear a written exam called GAT ( General Ability Test) and MAT ( Management Ability Test). Basically it is an objective type test which have standard questions on Quantitative Ability, Reasoning and Verbal Ability along with a section on General Knowledge ( which includes knowledge of fashion). The level of the exam is medium. Thus if you are preparing for CAT, this exam is a cakewalk. After the written is over , you will be called for a Group Discussion,  Psychometric Test and Interview and that’s it. GDs and interviews are standard as in any MBA institute. Psychometric test measures your psychological soundness to complete the course.

How to Prepare: You would do well to prepare for the general MBA examination. Generally the process starts in the month of October/November. The entrance examination is in the month of January and the GD/Interview in the month of May.


You can find more about MFM programme here.

In future posts, I would elaborate on what to read/study for NIFT MFM.

Tuesday, June 15, 2010

NIFT or Pearl

This is a question asked by one of my readers:


I have cleared NIFT and got 1xx rank for MFM & have also got through Pearl Academy of Fashion for RETAIL MANAGEMENT.



Please guide me what should I do n what chances do i stand for nift centres , I have heard that exposure n placements are better for pearl. In Long term I want to establish my own enterprise. Please advice accordingly.


NIFT or Pearl

This is a question in the minds of the students especially for those who got through the test of both the institutes. Since it is question of people's career therefore it should be handled very carefully. 

An institute is a combination of the efforts and brand name. In fact, brand name gets developed after a lot of effort. 

NIFT was started to impart fashion education at a time when there was no such institute. Over time, it has built a reputation on its own. Its alumni is spread all across the country. Under the aegis of Ministry of Textiles, it commands vast resources which is always good for students. 

Pearl, on the other hand is a private venture which also- thanks to the efforts made by the administration and faculty-has established a formidable reputation. It has the advantage of an inhouse industry which prepares the students to see things in action. Its faculty is well qualified and labs furnished. In that sense also it is as par with NIFT. But it has a constraint of resources which are not as widely available as are in NIFT.

In fact, pearl goes far beyond that. It studies the NIFT curriculum, improves it and presents to its students. It tries to get the same level of faculty as NIFT has. In that way, it is almost reactive to NIFT actions. 

Now what to choose ? given a choice, one may want to opt for NIFT as here the brand name guarantees the career.  Thus if one wants to have a strong career, brand name NIFT always help. It also helps you in getting loans for your industry. The alumni spread all over are an additional asset. 

But maybe I am biased. I would welcome comments giving some other reasons for opting Pearl vis-a-vis NIFT. 

Thursday, June 3, 2010

Controlling your Supply Chain through Visibility

While building a supply chain system, it is necessary to have a look at the existing processes and an attempt should be made to reengineer those. If  this is not done there is a risk that any system will only automate the existing inefficiencies.

The best systems are those that blend technologies with the organizational practices.

The best practice is to control velocity and variability in the supply chain by Visibility.

Visibility is the ability of an organization to have an unobstructed view of all the information related to planning and execution.

From a waterfall model ( where high level design leads to strategies and tactics), the present view of supply chain is a component-based aggregation of solution that has an inbound and outbound perspective.

The Four P’s of Visibility of the Supply Chain are:

1.       Product Visibility
It includes item definition, localization, life cycle and quality

2.       Process Visibility
It includes planning operations ( e.g. demand forecast), manufacturing operations, purchasing processes, performance analysis, billing and returns logistics.

3.       Partner Visibility
Supplier portfolios can be created with target margins set for each product, based on demand for product. These targets can be used to negotiate and understand the company’s margins.

4.       Profit Visibility
This basically includes how supply chain operations are impacting the bottom line.

You can read the full article here

Wednesday, June 2, 2010

Private Firm to Buy Stake in Catmoss

Private Equity Firm SAIF partners may buy around 30% stake in Delhi based kidswear retail chain Catmoss for Rs. 70 crore.

Catmoss runs around 150 exclusive brand oulets.

Established in early 2000, it clocked a net profit of around 7.5 crore with a revenue of Rs. 130 crore.

This is second PE investment after TPG and Bain Capital took 35% stake in Lilliput Kidswear.

The Market for children's apparel is about Rs. 21000 crore.

Monday, May 24, 2010

Do Names Matter ? Case Study for Apparels

Please read this article and then come back to answer the following questions:

1. Do you think that name really matters when you are a startup.

2. How name can be a differentiator of the quality.

3. Do you think that unusual name has the power to attract potential clients.

4. You are a business manager of an MBO. You are given an assignment to look into the business prospects of an upcoming brand. Would name matter to you. Why ? Why Not.

5. Can names have the power to accentuate quality in the minds of the potential clients.

6. What are your conclusions.

Tuesday, May 18, 2010

Retail Trends- Happy Hour Discounts

Retailers are Offering Discounts for customers purchasing on odd hours.

Examples:

1. OKaidi: Children's apparel and accessories offering 20% discounts on the purchase of its usual T-shirts, Chemises and other items between 10 am and noon- Monday through Thursday. Okaidi registered a 200% Hike in sale.

2. Fashionandyou.com, an e-commerce site selling premium brands, let customers win free luxury gifts every 15 minutes between 5pm and 8pm

3. Cinemax introduced "3 Idiots" with 28 shows daily in some places, the first would start at 6 am. Audience number pushed up by 100%.

4. Candies, a restaurant, offers 25% discount on food between 8pm and closing time. Their unsold inventory has reduced from 15% to 2% at the end of the day.

5. Big Bazaar offers deep discounts every Wednesday, otherwise a lean day.

Benefit to the Comapnies

1. Boosts revenues
2. Eases seasonal and peak-time customer load
3. Improves manpower utilisation
4. Attracts new entry-level customers which otherwise might not have come.
5. Customers for such promotions also tend to buy at full prices.

Dangers

It might wean away customers willing to buy at full price.

The objective is to  increase the sale, assuming that the peak hour sale remain the same. However, this assumption may not be valid.

Read Full Article Here

Unorganised Retailing in India - Making Big Bucks

Local Brands are doing more business than any of the multi brand outlets.

1. RMKV is a 100, 000 sq feet department store in Tiunelveli. It does a annual sales of Rs. 115 crore. This is more than any single Lifestyle, Central or Shoppers Stop store in the country.

2. Kalyan Silk, in Trissur has a 85000 sq feet, reportedly doing a business of 100 crore per annum. Also they have 125000 sq feet ninelevel megastore in Ernakulum, Kochi. It does more than 150 crore.

3. Pothy's in Panagal Park Chennai does 150 crore.

4. even a smaller 12000 sq feet Mysore Saree Udyog store in Bangalore does close to 100 cr per annum.

5. A collection of the 4-5 Alfa stores in Irla in Vile Parle (West ) in Mumbai does an annual sales of well over 200 cr.

6. Compaing the largest Lifestyle or Shoppers stop is still below 80000 sq ft.

7. Also highest selling Central barely manages Rs. 100 cr, Lifestyle is under 95 cr and Stopper's stop is under 75 cr.

8. Comparing return to realitors, a 40000 sq ft Pothys store after doing 100 cr, with 4.5% revenue share, the landlord gets a rent of Rs. 93.75 per square foot per month on carpet area.

9. On the other hand a 40000 sq feet store of a Lifestyle even at 7.25% revenue share, after doing a business of 45 cr will yield 67.97 sq. ft.

Thus there is a lot of way that the organised retailing has to cover to compete with their non organised counterparts

Read Full Article at


Retail Trends: Taking Advantage of Auspicious Days

1. Future Group made Rs. 150 Cr. in Additional sales on Akshay Tritiya.

2. FG is focussing on Panchang - Hindu Almanac- to target their promotions.

3. About 30% of the total sales of modern retailers come from promotions around festivals.

4. FG is targeting 1/3rd of 150 auspicious days in the Hindu Calendar.

5. FG consulting with Mumbai based Salgaonkar Family, publishers of Kalnirnay, Indias largest selling Almanac ,with 10 m copies a year.

6. 60-70% of shopping of customers happen during festivals.

7. At least 40-50% takes place during the peak festival season, between September and November

Please read the full article here

Monday, May 17, 2010

Below the Line Marketing and Advertising

Below the Line (BTL) Marketing and Advertising

Wikipedia says it all

"...while ATL ( Above the Line) promotions are tailored for a mass audience, BTL promotions are targeted at individuals according to their needs or preferences. Thus BTL sales promotion is an immediate or delayed incentive to purchase, expressed in cash or in kind, and having short duration.While ATL promotions can establish brand identity, BTL can actually lead to a sale. ATL promotions are also difficult to measure well, while BTL promotions are highly measurable, giving marketers valuable insights into their return-on-investment. ".

 There is another strategy called TTL ( Through the Line) which is an optimum mix of BTL and ATL.

Please refer to this article to understand how Jeans companies in India are using BTL to promote some of their products.

Sunday, May 16, 2010

Company Profile: Reebok

Reebok

1. Globally Fourth after Adidas, Nike and Puma

2. Number 1 in India- 53% share of branded sports footwear market ( estimated size 3500 cr per annum)

3. Its lowest price point is less than 1000 ( Rs. 999 for a pair of jogging shoes.

4. Has 1000 stores in 325 cities.

5. About 300 outlets cater to lower end of the market.

6. It offers 80 SKUs under 2590.

7. About 70% of the sales volume come from low end product. In terms of value it constitutes 50% of the revenue. 

8. Over 80% of the footwear is manufactured in India.

9. Reebok India MD- Subinder Singh Prem.

10. Yard stick to open a store: Any location which has a population of 10000 to 15000 can sustain a Reebok store.

11. Cost of Opening a Reebok Store in a semi urban market is not more than 2 lakh. 

12. Even if a franchisee, who owns the place sells three to four pairs a day, there is a profit of 30000 to 40000 per month.

13. Also shoes are sold to company on a consignment basis so company is only paid when it sells.

14. Reebok is thinking of leveraging social networking websites- by opening Reebok clubs across websites where people can exchange notes on fitness and Reebok products.

15. Middle class buyer change their footwear every three months and at lower end, the customers are changing once in 15 months. 

16. How Reebok is Segmenting to take advantage of both the class- and mass- market

a. Segment for Health and Figure conscious women- Easytone 

b. Fashion Conscious- Manish Arora collection of Fish Fry shoes.

c. Offering Free Reebok shoes with annual subscription of mail today.

d. Mass Market- Extended its sponsorship with KKR. opened a store in Kolkata- selling KKr merchandise.
At least nine players in Indian cricket team uses Reebok Bat.

Saturday, May 15, 2010

Apparel Exporters Looking at Home Markets

Apparel exporters have started either to supplying the domestic companies or set up their own retailing units. 

Examples:

1. Bangalore Based Indian designs supplying to H & M and Old Navy now trying to open 30 new stores with their western casual brand Identiti. Presently they have 12 stores. ( Naseer Humayun- MD of Indian Designs). At present 5% of the revenue is from domestic market.

2. Forbes Brands, a division of Gokak Textiles, have launched a youth focussed innerwear brand recently called Facit. ( Nischal Puri- CEO of Forbes Brands).

3. Integra Apparels and Textiles of Ashok Piramal Group- supplying to brands such as Dockers, Levi's and Benetton. The revenues of the company from domestic markets have increased from 15% to 40%. The company supplies to Madura Garments, Reid & Taylor and Arrow.

4. Gokaldas Exports, India's biggest exporter- now increased their sales from 4% to 8% in the domestic markets. 

5. Go Go International, supplying to brands such as VF Corp, Lee and Marks and Spenser is exploring in domestic markets.

Reasons for entering into domestic Markets

1. To offset the losses arising from economic slowdown in the US and Europe.

2. Rupee fluctuation is becoming a concern.

3. Increase in yarn rates are making exports uncompetitive. While consumers in India have been able to absorb  a 10-15 percent hike in prices of garments. 

Challenges

1. Brand Building and Marketing are the most crucial factor for a company who want to establish their retail presence in India.

Friday, May 14, 2010

Case Study: Stars Turning Fashion Designers

Film Stars Turning Fashion Designers

Please read the full case here. Please try to answer the following questions:

1. What type of ethical issues are involved

2. Why a film stars want to create their own fashion label.

3. Why people will buy those brands.

4. You are the manager of an apparel retail organisation having luxury apparel retail store. Would you like to keep such range in your store. Why ? Why Not ?

5. You are an upcoming fashion designer from NIFT. Would you welcome such a trend ? Why ? Why Not

6. Think from the Perspective of Marketing Mix ( Product, Price, Place, Promotion). Does it make a sound business sense? Why ?

You can also read the related Article: When celebrities co-create brands

Thursday, May 13, 2010

Trends in Apparel Retail

1. Ethnic Wear is the flavour of the season

Fact-File

1. For Max, the value retail arm of Landmark group, women's Indian wear account for 25% of their revenues.

2. Planning to introduce saris in their next store in Chennai.

3. For Landmark premium department store, Lifestyle, the ethnic wear accounts for 20% of their sales. the ratio of western and ethnic wear has improved from 70:30 to 50:50.

Fusion Wear: Combining Indian and Western Outfits.

4. Lifestyle Indian wear Label, Melange.

5. Shopper's Stop has introduce a new fusion wear label, Haute Curry. For them Indian wear account for 25% of their sales.


2. Big Brands are heading for North East


3. European Brands continue to Coming in India


4. Concept of Family Stores gaining Popularity

5. Hyper Markets are gaining Popularity

Fact File

1. Spenser's Retail plan to open 15 Hypermarkets in FY11.

2. Franchise Tie-ups with three international Apparel brands- Ecko Unlimited, UK Based kid Brand Ladybird and premium casual wear brand Beverly Hills Polo Club.

3. Planning to open 20 exclusive Beverly Hills Polo Club  stores in the NCR region, Punjab and Mumbai.

4. planning to raise the contribution of apparel business from 10 per cent to 30 per cent.

5. They have shut down 100 super stores last year

Saturday, May 8, 2010

Company Profile: Diesel

Diesel

1. Founder- Renzo Rosso

2. Diesel Started the concept of distressed Denim

3.  Diesel was created in 1978

4. Presence in 80 countries

5. 5000 outlets

6. Turnover- 1.3 b Euro ( 7570 Cr.)

7.  Partnered with Reliance Brands Ltd in 2010

8. First Flagship Store in Mumbai-7500 square ft.

9.  Latest Advertising Campaign "  Be Stupid"

10. No two stores of Diesel in any part of the world can look the same- the displays and merchandise are different.

11. Diesel and Reliance hope to open seven stores in India this year and 22 within five years.

Friday, May 7, 2010

Case Study: Replay Planning for New Partners in India


Questions

You are the business manager of a major apparel company. There is a proposal before you to join hands with this company. What will you decide and why ?

Analysis

Your answer will depend upon your response to the following and many other questions:

1.  Why would you like to join hands with Replay? Think about product, price, placement and promotion and of course profitability.

2. Why Replay wants to have its presence in India ? Think about the five factors as mentioned in 1.

3. Why companies like Replay want to tap India through direct route than indirect route ?

4. As a customer why would you like to buy Replay Jeans ? Think about product, cost, availability and brand value

Now you can decide, I guess. Please post in comments about your decision and the reasons for the same.

Thursday, May 6, 2010

Knowledge Primer- Private Labels

Private Labels are those brands which are owned by the retailers themselves.

Normally in an MBO ( Multi Brand Outlet ) you can see many brands which are external to the store.

However the store also offer their own brands. For example 'STOP' is a private label by Shopper's Stop.

Private labels work better in categories where there is a poor brand recall. For example in cereals category only two brand names come to the mind.

Private labels are recent phenomenon in India. According to an estimate private labels account for nearly 40 per cent of Wal Mart sales globally.

Buy why retailers keep private labels. The answer lies in margins. The margins are much higher in keeping private labels. They range from 15-20 per cent in FMCG, around 20 % in electronic goods and 30-70 per cent in apparels. The other reasons are differentiation and increase in consumption.

But why customer buy private labels ? The answer could be that store labels spell trust and savings.

The key concerns for retailers are inducing the first trials. It is seen that once used, customers have a very good brand loyalty.

Private labels work best in low-involvement category. For high-involvement categories, such as apparel, it is the name of the store that matters the most.

Tuesday, May 4, 2010

S Kumar Inks Deal with DKNY men's Line

1. Deal between SKNL ( S Kumar Nationwide) with DKI ( Donna Karan International), a part of LVMH Moel Hennessy Louis Vitton.

2. The deal : SKNL will source, design produce and distribute full range of DKNY menswear globally except Japan.

3. MD and VC of SKNL: Nitin S. Kasliwal.

4. CEO, LVMH and chairman and CEO, DKI: Mark Weber

5. Benefits: To SKNL: An alliance with one of the world's best known brands and an entry into European Markets.

To DKNY: SKNL's expertise in the men's business.

6. Brands with SKNL: Reid and Taylor, Belmonte.



Monday, May 3, 2010

GD Case Study for MFM: Discount Coupons

Please read the full case here.


Now try to answer the following questions:



1. You are an apparel retailer having 50 stores all across the country. Would you like to avail of such services. Give Reasons. 

2. You are a customer of apparel retail. Would you like to go to such websites and avail yourself of such service. 

3. What type of apparel retail do you think such services are applicable; formal, casual, ethnic, mens, womens or kidswear. Why ?

4. You want to become such a service providers. What all you have to take care before launching such venture. 

Retail Alliance between Future Group and Carrefour

Facts

Carrefour SA: Europe biggest retailer.

Origin: France

Plans to open 150-300 Carrefour branded hypermarkets in India .

Carrefour India Head: Jean Noel Bironneau

Future Groups currently runs 125 Big Bazaar Hypermarkets.

Carrefour stores will occupy between 50000-80000 sq. ft.

The first independent cash-and-carry store of Carrefour: Delhi's eastern suburb of Seelampur.

Cash-and-Carry Stores: The stores that sell products only to retailers and other business establishments.

Sunday, May 2, 2010

Some Definitions of Stores

You would do well, if you keep these definitions of store in mind.

Please remember, however, that Indian stores are more or less a combinations of each of these (and size is much smaller). So to categorize a store in purely one category would be a disaster.


Mass Merchandiser

a retailer or retail store that seeks to sell large quantities of goods quickly through such means as discounting, customer self-service, or unadorned display and packaging, as in a warehouse.


Destination Store

Giant retail store combining the attributes of several categories of stores: the size of a mass merchandiser, the variety and scope of a department store, and the low prices of a discount store. So called because consumers are willing to travel a good distance to shop in it.

Department Store

Large retail establishment with an extensive assortment in variety and range of goods, organized into separate departments. All departments are housed under the same roof to facilitate buying, customer service, merchandising, and control.

Discount Store

A department store which offers its items at a lower price than many other retail stores. Discount stores are often able to drop their prices due to efficient distribution methods. Many of the largest discount stores are also chain stores, and include Wal-Mart, Target, and K-Mart. Furthermore, many of these discount stores could also be categorized as big-box stores, as they grow to include more and more products, sometimes even including a large grocery section.

Case Study: Concept of "360-degree" lifestyle store

Please read the full article here

Questions (Any of these situations can be asked in a GD):

1. You are the brand manager of an apparel retailing company having 12 stores all over the country. Your Boss gets excited about the concept. Would you recommend ? Would you not, why ?

2. You are business manager of a cafe chain in India. Your boss gets excited about the concept. Would you  recommend ? Would you not ? why ?

3. You are a store manager of an apparel company. The company management is asking your recommendation towards giving a space for opening of a cafe. Would you recommend ? Would you not ? Why ?

4. You are a customer coming for shopping in an apparel retail store. You spot a cafe inside the store. Would you welcome such a change, be indifferent or dont like it at all .Why ?

Friday, April 30, 2010

What to Study for GD/ PI for MFM

I have been asked this question several times. It is important that there should be certain background or orientation in order to perform well. Here are my top readings that you can do for GD/PI for MFM.

1. Images Retail: It is a monthly magazine, you would do well to go through it. It is also important that you know the meanings of the terms such as footfalls (No. of people entering in a store), Ticket Size ( Average bill value of a store), Visual Merchandising ( The display of merchandise in the store) Markup ( Cost + Profit) and Margin ( Sales Price- Profit).

2. Economic Times or Financial Express or Mint: Look for the news related to apparel retail, textile or apparel exports.

3. Business of Fashion: A must read  magazine. Please  go through it atleast to have the idea of how brands are doing.

4. Vogue: To get a hang of what fashion is all about.

5. Visit to a Mall: Go to apparel stores and note down:

a. Best store in terms of visual merchandising
b. Best store in terms of variety.
c. Best store in terms of service
and so on... you will get to know so many things about stores.

6. A textile Book: Get to know the meanings of Voile, Silk, Chiffon, Georgette, dyeing, Batik and so on. Should know the difference between weaving and knitting, dyeing and printing etc.

7. Your own wardrobe: Study your cloths. How many formals, casuals etc do you have. What are your wearing and spending patterns.

This is just a small list where you can get enough material that will see you through the conversation during GDs and PI.

Louis Philippe- Ventures into Mens Footwear

Overall Market of Footwear in India: 30,000 cr.

Branded Footwear Market: 2000 cr.

Expects the new category to contribute at least 15% of the turnover.

COO of Louis Philippe: Vishak Kumar

No. Of Stores where footwear range is available: 130

Price: 2999 to 4999

Global and Local sourcing: 1 lakh pairs a year

Growth of Louis Philippe Brand: 20% per year

Wednesday, April 28, 2010

Discussion Topic: Pepsi Launching Fashion Merchandise in India

Discussion Topic

Pepsi Launching Fashion Merchandise in India

A report by Financial Chronicle had reported in September that Pepsi would enter into exclusive fashion and apparel stores in India to sell its new brand of merchandise. It would be in mid price segment with Tier II and Tier III cities would be the core markets.

1. Why Pepsi is thinking about entering into the apparel and fashion business in India.

2. Can it Tap the opportunities in the Indian Retail Industry with its apparel and Fashion Business.

3. How it will fare in the hotly competitive Indian Retail Industry.

How to Approach GD in MFM- The Production Paradigm

How to Approach GD in MFM-  The Production Approach

This approach is more applicable for the students preparing for the M.F.Tech Course. However, the cases can be asked in MFM too. Again let me first discuss a brief theory:

Any production situation is characterized and judged by broadly four parameters:

1. Quantity
2. Quality
3. Cost
4. Delivery

Which means that these four ( Double Q, C,D) can become levers for you to initiate, contribute and conclude any discussion based on these. Let me tell you a typical situation:

You are the CEO of an apparel manufacturing company. How will you beat manufacturer from say, Bangladesh.

Here the parameters for you to evaluate are Quantity, Quality Cost and Delivery. Thus can we give the right quantity with the quality delivered at the right cost and within the time asked by the client. The whole discussion can revolve around the levers. 

Hope this will take care of at least 20% of the discussion topics asked in MFM.

Cheers !!!

Tuesday, April 27, 2010

How to Approach GD in MFM- The Marketing Approach

How to Approach GD in MFM

There can be many approaches towards contributing to a GD for MFM. I like the marketing approach best, because most of the topics/ case studies asked in MFM are related to marketing or retailing. For other approaches I will talk about them in my subsequent posts. Here I would like to deal with this approach:

The approach uses some theory of marketing. Let me discuss that first. This is simple and easy to understand.

Marketing is the satisfaction of a customer's need profitably. That is it. Thus if a customer craves for social recognition, then clothing can satisfy that need. And if you can offer that solution to him where both you and him are satisfied, your job is done.

Having said that however, it is not so simple. There can be four cases:

1. The clothing that you offer is not attractive enough so the social need is not satisfied. In that case the customer would not buy it. The solution to this is called "Product Design"

2. The clothing is not right priced: either it is very high priced so that it deter customer to buy or it is very low priced- which customer find beneath their dignity to buy. This problem lies in the domain of "pricing".

3. The clothing is not available at all. Or if available, then the shop is too far and too unattractive a place to to. This problem lies in domain of "Placement"

4. The clothing is right, very genuinely priced and available but it is not known to people. In that cases advertisement and other support is needed so that people know about it. The problem lies in the domain of "Promotion".

Now any  problem related to marketing and retailing can be fitted in the domain of solving one or more of these 4 Ps of marketing ( Product, Price, Place and Promotion). This will be a structure where you can initiate a discussion and give valuable suggestions or even can close the discussion.

Here are some of the examples where a case can be presented and where the problem can be structured as that of one of these 4Ps.

You are a local apparel retail and Reliance Mart has come in the neighborhood. What tactics would you adopt to counter this.

So your thought would be changing either the product offer, or pricing or becoming more closer to the customer or promoting yourself in a different way.

I hope you are able to understand what I am trying to explain to you. In fact, 70% of the GD topics in MFM revolves around marketing theme. Apply it in different situations and enjoy ?

And yes, you can always pose your doubts in comments or Cbox provided at the side.

Cheers !!!