Apparel Online Bangladesh Magazine October Issue 2018 | Page 18

COVER STORY
Who will grab the manufacturing advantage …?
In a fast growing retail scenario for apparel , organised retail accounts for approximately 30-35 per cent of the total market and in the past , to a large extent , organised retail in apparel had been confined to menswear and to a lesser extent kidswear , which was primarily more in the unorganised sector , while the womenswear readymade segment was practically non-existent . A recent survey still puts menswear as the hottest selling category in domestic retail .
Less than a decade ago , most exporters did not even consider the domestic market as an option for increasing business . The focus was on how to capture more markets abroad and if possible , add new product categories to get better responses from the buyer . The success stories were few and exporters found the effort not worth the ‘ headache ’. But times have changed … even the most accomplished exporter is looking at getting a footing in the domestic market , either working with leading Indian brands / retailers or creating his / her own brand that could compete with international brands that already exist in the market . Yet , it is not an easy marriage and challenges remain .
The vibrancy of the domestic market for apparel and lifestyle products is attracting not only garment exporters but also the manufacturers from the neighbouring country – Bangladesh . While the global conditions have resulted in slowdown of retail business worldwide , India has emerged as a lucrative market . Post policy upheavals like implementation of GST , the opportunities to explore the Indian market by Bangladesh has increased and according to Export Promotion Bureau of Bangladesh , India has imported US $ 87.4 million worth of readymade garments from the country during July-November 2017 , registering a sharp rise of 56 per cent compared to US $ 55.92 million during the same period last year .
The free access of 61 items ( 48 of them in apparel ) from Bangladesh , recently introduced to balance the trade between India and Bangladesh ,
FACTS
• GAP is planning to open 50 more stores in the next 2 years .
• Ikea has opened its first store in Hyderabad and future stores are planned in Mumbai , Delhi-NCR , Bangalore , Pune , Surat , and Ahmedabad .
• The major Indian companies that account for a large chunk of Indian retail are – Future Group , Arvind Brands , Reliance Retail , Shoppers Stop , Trent , V2Retail , V-Mart and Tristar Retail .
• Arvind Lifestyle Brands is home to many international brands like Gap , The Children ’ s Place , IZOD , Ed Hardy , Aéropostale , Gant , Hanes , Arrow , Flying Machine , Cherokee , US Polo , Elle , Excalibur , Nautica , Calvin Klein , Unlimited , Geoffery Beene and Ruggers .
• Reliance Retail operates some 419 stores across India for top foreign brands including M & S , Vision Express , Quiksilver , Diesel , and others .
• Mass market has two major players – V-Mart and V2 Retail .
• Shoppers Stop Ltd is India ’ s prominent retail group and a pioneer in the organised retail industry with 74 stores in 33 cities .
• Future Retail Ltd . is present in 95 cities through 10 million sq . ft . of retail space and owns a portfolio of 24 leading brands .
on one hand give an alternate lowcost sourcing option to retailers , but on the other hand increase the woes of the smaller manufacturer working for the domestic industry . On their part , the domestic retailers want to ensure that the product costing meets their budget while getting reliable supplies for the stores . Reliability can be measured in the form of meeting the product specification , on-time supply and compliance to required systems .
By 2020 , if the industry were to grow three times and even if one out of the three parts were to be imported from Bangladesh , the one part – equivalent to US $ 15 billion – will need to be created within India only for the domestic market . The export growth will need additional capacities over the current ones . Eventually , the ideal factory will be one which works on modern manufacturing techniques , with reduced inventories and faster throughput – capable of delivering a quality product out of a compliant factory .
Sourcing for Indian market getting more professional …
Though exporters now understand the potential of the domestic market , still only a small portion of them deal in it and this is clearly due to a
mismatch between the working style and the expectations of the brand / retailer and exporters . For one , the domestic retailers / brands provide samples to manufacturer due to which there is an ambiguity in domestic production , whereas international buyers provide them with details like catalogue , tech packs , per inch thread to be used and more ; there is no scope for any ambiguity . “ There are many things that are very different ; to start with , the domestic quantities aren ’ t so big except for some brands . Say for 200 pieces and 400 styles , it is difficult for them to programme the machinery line-up for such quantities . Also , exporters fear to work with domestic brands because domestic brands have given payment problems to them in the past – they work on LC , we don ’ t ,” explains Haresh Mansharmani , Sourcing Head of the brand Mufti .
Most sourcing heads agree that the biggest challenge faced by maximum exporters entering into the domestic manufacturing scenario would have been regarding payment . All this happens because of the kind of payment systems / arrangement terms and conditions that they would have had . Generally , there are no payment guarantees as nobody does LC and rather work on credit
18 Apparel Online Bangladesh | October 2018 | www . apparelresources . com