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for export is also used for domestic, so processes move relatively together,” says Sushil.
Sushil also shared that during the traditional lean period for exports from May to September, manufacturing for the domestic market is a good choice, as it keeps the company busy and also adds to the bottom line. The only issue he faces in domestic market is duty-free import from Bangladesh which is hurting the growth of domestic manufacturers.“ Whichever top brand or retailer is in India, only source from Indian manufacturers those products which are not possible to be sourced from Dhaka; so it is a big obstacle in growth for companies like us,” bemoans Sushil.
Not surprisingly, the exporters today are looking at the domestic market with a fresh perspective as the Indian market is behaving like the international market in many ways, be it quality, styling, fabric or volume.“ The quantities in domestic markets have increased in last two years drastically like international market,” shares Dinesh Jain, Owner Dolphin Clothing, Mumbai. Domestic brands have an added advantage to solve production issues in a jiffy and thus save costs. Many working with Indian retail admit that in the present situation Indian markets are much better than European markets both monetarily and production wise.“ There are no advantages or disadvantages per se while working with both markets as both have its pros and cons,” says Dinesh.
As the country evolves, so does its people; and in India, the young generation is looking for high-end garment. Lots of international brand are opening their store in the country because of its potential. But the Future Group firmly believes that in the long run it will be the local brands and retailers who will rule the market, as they are most clued in to local preferences and well suited to serve a wider audience base. Exporters too have started looking at this reality and the convergence of interest is bound to create a seamless production base that will be a win-win matrix for all stakeholders.“ I will say in all honesty that as the market forces are placed currently, exporters should focus on export as well as domestic markets,” concludes Sushil.
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Vimal Shah with Seema Shah, Partners, Goodwill Impex
and the gap is getting narrower by the day. Domestic sourcing is also now increasingly following the path of export sourcing, more so as many professionals from international sourcing have switched to domestic sourcing and are bringing in practises that are helping the sourcing process at domestic retail to be more organised. But few crucial things are there which make domestic market still a second priority for exporters.
Among the most important deterrent is the long credit periods. Some of the exporters shared that the credit terms that result in‘ payment blockage’ for 60 days and even 90 days is very difficult to bear for them, as they are used to a cycle in exports which is shorter. The gestation period is too long … It takes 90 to 120 days in manufacturing and after that 3 months wait for payment, which means that the money gets blocked for almost 6 to 7 months. This is not viable for small- and medium-level exporters, so they do not like working with retailers.“ Tight payment terms are not viable specially when they offer margins of just 10 per cent or even less than this, most of the exporters don’ t have enough resources. Further, there are still some unethical practises with few retailers as their quality departments ask for favours without any reason. So, all this was like a torture for us,” informed a Jaipur based exporter whose name is not being disclosed on his request.
Vimal Shah, Goodwill Impex, Jaipur working with brands of Arvind, Reliance and Max doesn’ t see
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“ Indian consumers are becoming more demanding on quality because of which exporters will find it more comfortable to work with Indian retailers and brands. In response, the brands / retailers will also now turn more towards such players who understand quality.”
– Manu Menon, Regional Head Quality Assurance – South & East, Reliance Trends
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Sushil Aggarwal, MD, Eves Fashion
domestic as a growth driver for the company.“ I feel most of the exporters are doing domestic just because they don’ t have export orders, as of now and it is important to keep the factory running. There are less margins in domestic and no incentive at all; in exports we still have some incentives, like interest subvention or RoSL to name a few; also the GST paid is refunded. Further, as local teams are involved in the entire process, it is a harsher costing process as compared to exports,” says Vimal, who is doing domestic manufacturing from last 3 years just to feed his stitching machines. He further added that in domestic market, manufacturers work completely on the conditions set by the retailers or brands, as against the perceived impression that the working conditions are more flexible.
As usual, there is a different opinion also. Sushil Aggarwal, MD, Eves Fashion, Delhi is doing domestic market from last 5 years and that too on totally different platforms. His clients included Indian department store chain Shoppers Stop, brand Numero Uno and some wholesalers of Mumbai. Almost 2½ years ago his son Ankit Aggarwal launched his women clothing brand‘ Eves Pret A Porter’ and selling 6,000 to 7,000 pieces per month through online mode.“ We are utmost satisfied with the domestic initiative. Since our quality is up to the mark, we never faced unethical issues that many of my exporter friends complain about. Payment pressure is there, but overall conditions are now more or less like the export sourcing process. Even price we are getting from domestic, is almost as per exports. Most of the fabrics, we use
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