COVER STORY |
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of 30-90 days . There have been many bad experiences on this failed credit system . “ Domestic players are not good paymasters and don ’ t even commit . It ’ s always a risk with domestic players as it is difficult to know if they are in a healthy financial position or not ,” opines Kingshuk Pandit , who after many years as a sourcing person with leading brands , is now working as a sourcing agent for some domestic brands .
For the international brands , sourcing for Indian retail stores is pretty much similar to the sourcing procedures followed by the brands on a global basis . The buying team in India decides what products to buy from where , based on the understanding of what will work for Indian stores . The buyers look at collections from local sourcing team and sourcing teams in other countries . Once they decide on the products to be bought , the same is handed over to the sourcing team for details like price , delivery schedules , which vendor to place orders with etc . If the brand / retailer has a local sourcing office in any country , that is used for the sourcing process , otherwise the India office directly or through an agent does the needful . But decision to buy and place orders lies with the India office buying team .
Further , with the advent of Arvind , Madura , Reliance , and other big names that control sourcing for many international and national brands , the domestic landscape is changing for the better , so more and more exporters , who shunned the domestic market , are now interested in working locally . Also , the volumes being offered earlier have also increased significantly , creating competition at another level . “ With volumes in Indian retail increasing substantially , it is becoming easier to place orders more competitively ,
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whether with Indian vendors or at other locations like Bangladesh ,” says J Suresh , MD and CEO at Arvind Lifestyle Brands and Arvind Retail . The company 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 , Sephora , Unlimited , Geoffery Beene and Ruggers .
Arvind Brands has a Global Sourcing Division , headed by Anindya Ray , supported by Ramesh Ramalingam as Merchandising Head . There are 200 people working within this division , which sources both for the local brands and international brands . “ We are sourcing 95 per cent of our products directly . From which countries we buy depends upon the product . For bottoms , light wash bottoms , denims , we go to Bangladesh , for specialised fabrics , we go to China . Variety is amazing in China . For my international brands , I have to go to China . The volume of sourcing that we do is 25-30 per cent from China and Bangladesh and the rest is done from India ,” shares Chaitra Ramamurthy , Sr . Manager Sourcing , Arvind Brands Ltd .
Over time , Indian sourcing office of international brands are placing orders in Bangladesh for practically all products except fashion items for women that have value additions . T-shirts , jeans , men ’ s shirts , undergarments and even kidswear are coming from Bangladesh . Companies like Reliance Retail have their own liaison office in Dhaka to support their sourcing operations from the country . Proshanta Kumar , Senior Sourcing Manager , Reliance Retail ( Bangladesh Liaison Office ) overseas operation for all reliance brands . The international brands
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FACTS
• Aditya Birla Retail Ltd . is the retail arm of Aditya Birla Group , a US $ 41 billion corporation . Fashion brands of Aditya Birla Fashion and Retail Ltd . ( ABFRL ) include Louise Philippe , Van Heusen , Allen Solly , Peter England , etc ., including India ’ s first fast-fashion youth brand , People ; India ’ s largest fully integrated fashion multi-brand outlet chain , Planet Fashion .
• India is expected to become the world ’ s fastest growing e-commerce market , driven by robust investment in the sector and rapid increase of internet users .
• A major player in e-commerce platform , Bangalore based Myntra is expected to touch an annual turnover of US $ 1.6 billion in 2017-18 surpassing all major bricks and mortar retailers .
• Global leader in e-commerce , Amazon is making quick investments to capture a larger pie of this market followed by Reliance Ajio .
• The cash & carry format is considered among the fastest growing segments .
• The Rs . 6,800 crore cash & carry market has been growing at 13 per cent annually .
• Walmart India plans to add 50 more cash & carry stores over next four to five years .
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that they handle include – Scotch & Soda , Brooks Bros , DC , Diesel , Dune , Ermenegildo Zegna , Gas , Quiksilver , Steve Madden , Kenneth Cole among others .
Reliance Retail sources a wide range of products from Bangladesh in woven and knits with denim being the largest category . The current volume sourced from Bangladesh is about 3 million units / annum this year . “ There are three reasons for going to Bangladesh : it ’ s a low-cost manufacturing destination ; and secondly , it ’ s a scalable production capacity nation . Also , it ’ s easy to import fabrics ; we use the Chinese supply chain into Bangladesh to bring the goods in India . We procure lot of yarn dyed shirts from China via Bangladesh as the country is still very competitive in this category . The advantage here is that you get differentiated fabric and of course there is cost benefit compared to other Asian countries ,” says Rajesh Lalla – Senior Vice-President , Reliance Retail .
The H & M India office is buying huge quantities of undergarments from Bangladesh for its India stores . The Swedish global fashion giant , which has committed Rs . 700 crore ( US $ 96 million ) towards FDI in India , has 31 stores in India and last year , H & M , which is also available online , did a business of Rs . 940 crore ( US $ 129 million ) in India . “ Indians are aware about global trends and they want products at very competitive prices . So , we source from wherever the products are better priced , especially in basic products ,” says Dhatri Bhatt , Head – Communications at H & M Hennes & Mauritz India Retail Pvt . Ltd .
Most retailers are sourcing from Bangladesh for the price advantage that it offers , but with ‘ Make in India ’ becoming a matter of pride and fast delivery for fresh stock a necessity , local sourcing is picking up . “ We were earlier sourcing about 40 per cent of our products from Bangladesh but we have reduced it to 10 per cent ,” claims Rakesh Biyani , JMD , Future Group .
As the Indian domestic retail gets competitive , every manufacturer , whether a local supplier , an Indian exporter or a Bangladeshi manufacturer will have to offer their best in all areas of the business … after all , the apparel retail sector has always been about the survival of the fittest .
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