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Photo: K. Gajendran

What’s in store Western wear accounts for only two per cent of the market share

The largely untapped Indian consumer base has become the latest target of foreign retailers. “We believe in the country and the potential it has to grow,” said Troels Holch Povlsen, Chairman, Best Seller. The group’s men’s apparel brand Jack & Jones will hit the Indian market this year.

However, at the CEOs Conclave, B. Nagesh, Managing Director, Shopper’s Stop, asked if people’s spending power has increased and the market too is growing, why aren’t many retail organisations registering profits.

Several reasons were cited. For a country as diverse as India, it is difficult for a marketer to have a common strategy. Concepts that click with people abroad may not be applicable to India. Said Aaron Boey, Managing Director, Levi’s (Asia Pacific), “Indians don’t like fashion to be thrust upon them.”

Kishore Biyani, CEO, Future Group, seconded this thought. “Designers look westwards for inspiration but the need is to look inwards. We have to take into account the aspirations of the small town.”

Numbers only substantiated the contention. Ireena Vittal, Head, Retail Practice, Mc Kinsey & Co, pointed out how when it came to women’s wear, the sari still held 60 per cent of the market share and the churidar or salwar-kameez held 38 per cent while western clothes held only two per cent of the share.

This pointed to the issue of lack of innovation in clothes – blending classic with the contemporary. An example was the concept of Indo-westerns that took the country by storm a couple of years ago only to die a slow death.

“People don’t buy brands, they buy an identity. Brands have to change themselves before people do, if they want to survive,” said D. Shivkumar, Managing Director, Nokia India.

Experts said sale was another deterrent. “We are making shoppers turn into bargain hunters. This will harm the industry over a period of time,” warned Ireena.

The rise in real estate prices and high entry taxes on foreign brands were cited to be the other reasons why the retail industry was not flourishing. But beyond these, the delegates felt there were bigger factors retailers needed to look into. While most retailers are looking to sell their products to tier I of the Indian population, it comprises only 11 per cent of the people.

The big chunk of 55 per cent falling under tier II — the middle class — remains untapped. Is the lack of a mass spectrum apparel brand that cuts across backgrounds the real reason for meagre profitability? The speech by EVKS Elangovan, Minister of State, Ministry of Textiles, echoed a similar feeling. “Can fashion be within the reach of everyone? Can a ‘Nano’ happen in the fashion business?” he asked.

But it was not all grim talk. There were success stories like Koutons, which have tapped the right market and recorded a growth rate of 142 per cent over five years.

“There is a market of 400 million waiting to be tapped. With a good quality product at the right price, our aim is to reach out to India like the Indian post office system,” said DPS Kohli, Chairman, Koutons.

The industry representatives were confident the inconsistencies could be dealt with over a period of time, as Indian retail is still at a nascent stage. “Just give us a little time,” said Sanjeev Agrawal, CEO, Pantaloons.

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