Indian exporters need to change mindset and move beyond myth
EMERGING MARKET of the new-found market vibrancy but also points at the increasing disposable income among people outside the thriving metropolis of Moscow and St . Petersburg , who the retailers want to rope in to increase their customer base in the country . The flourishing economy has understandably given rise to an expanding middle and upper class which are not only restricted to the big cities , but are also creating a huge consumer-centric market .
If brands such as Benetton , Zara , H & M , Colin ’ s , Mexx and Matinique , lead the mass market segment , retailers like Aftco , Amasioni , Artigli , Bugatti , Climona and Future along with many more are occupying the middle market . Armani , Ferre , Crea , Versace , Chanel , Christian Dior , Jimmy Choo , Tiffany , Bvlgari and Ermenegildo Zegna are some of the major names that share the upmarket niche segment . Together all these brands are actively developing all possible segments of the apparel retail business simultaneously . As per leading professional consulting firm CBRE ,
Myth , challenges or ‘ perceptions ’: Reality and Solutions
• A lot of paper work , customs formalities / documentations required : Take the help of allied agencies which too is required initially .
• Language barrier : Not much in big cities like Moscow and St . Petersburg .
• Entry is difficult : Work through Indian agents who have deep roots there ; they know the Russian systems . Approach top companies , few of them do have offices in India .
• Payment issues : Be clear about terms and conditions ; try to work with established brands .
Indian exporters need to change mindset and move beyond myth
Although the overall apparel export from India to Russia is not much , but growth seems impressive . According to official data , in calendar year 2016 , India ’ s total apparel export to Russia was just US $ 65.78 million and in 2017 , it grew 28.46 per cent to reach US $ 85.5 million . A major portion of growth was in woven garments as this segment surged 60.52 per cent while growth in knitted garments was just 4.03 per cent ( see graph for detail ). Apparel Online talked to many exporters across the country , a majority of who have never worked with them . The reasons were the usual ones : payment issues , language barrier , complicated documentation , mafia culture and never got enquiry …, to mention some .
Not surprisingly , these reasons have created a trust deficit that stops exporters from exploring the Russian market . But interestingly there are few exporters who are working directly with Russian buyers and doing business as comfortably as they do with any other country of Europe or US . They have none of the above-mentioned issues but they are also of the view that in recent years the devaluation of ruble was a big issue for them and it impacted highly on the price . ( Financial crisis in Russia during 2014 – 2017 was the result of the collapse of the Russian ruble beginning in the second half of 2014 ) Few exporters do see some downfall in orders also but business is continuous with them .
Some of the stakeholders of the industry having experience of working with Russian market are also of the opinion that there is a segment in Russia who work in unorganized way and all the above-mentioned issues come when any exporter is working with such segment . The reality is that the apparel segment continues to be highly fragmented in Russia , even in 2017 , due to the strong presence of no-name products and unknown brands from Asian manufacturers . The strong position in apparel was based mainly on the proliferation of lowcost local and foreign unbranded products with designs similar to those of the leading brands .
In this scenario , organized retailers and brands in Russia are growing and exporters working with such companies have also seen growth from their Russian operations . Overall , experts feel that perception about doing business in Russia needs to change . Moreover , apparel export business is always full of challenges and every day a new challenge presents itself , so why can ’ t Indian apparel exporters seriously try to overcome challenges of Russian market , if they are looking for a very potential market . No doubt , Russia has many potential buyers that provide a good chance of big growth in future for the apparel industry .
www . apparelresources . com | MAY 1-15 , 2018 | Apparel Online India 19