OPPORTUNITIES E-RETAIL but in different sizes . Some exporters doing this segment have noticed nearly double growth in order size . Earlier , mostly small manufacturers with 50 to 70 stitching machines were working with these platforms but now with the increasing order sizes , mediumlevel exporters are also moving towards these portals . “ Order quantity for such platforms has become double in last three-four years ; and as it will definitely grow further , so I am working with these platforms to secure my future ,” said Anand Jain , Director , Sarbi Apparel , Delhi . Having factory in Ghaziabad , the company is working with Myntra and Jabong and is especially making sportswear and winterwear for these platforms .
Apart from future growth opportunities , better systems ( specially compared to smalland few medium-level overseas buyers ), payment safety , more understanding of domestic market …, are the few main reasons that are attracting the exporters to these platforms . Total use of technology , standard operating procedure ( SOP ), full transparency and automated system from PO to payments – have all made these online players have better options than many overseas buyers . Whatever platforms are there , payment is no issue with them . Even no follow-ups are required for payments . Moreover , payment cycle is around 45 to 90 days . In case , one is selling one ’ s own brand , payments are on timely basis as
Anand Jain , Director , Sarbi Apparel
EXPERTS ELABORATE …
Rahul Mehta , President , CMAI , Mumbai
It would not be accurate to state that exporters have started working in a significant way with e-commerce . In fact , they have just about started with offline retailers in the domestic market , primarily to offset their drop of export business . E-commerce is largely characterized by old season merchandise ( OSM ) which is offered at steep discounts . Secondly , a very large range of styles are on offer and dispatched in small quantities to large number of customers ; similarly the return is also equally large by the customer . Exporters would typically not find any of these characteristics convenient . They are used to manufacturing against order , – so concept of OSM is non-existent , except in case of order cancellations or overruns ; they are used to supplying to a few customers in large quantities , and significant quantities as per style – exactly opposite of what e-commerce would typically require , and the question of customer returns normally do not arise . Hence , we have not seen too many exporters get onto the online or e-commerce channel . Amazon is doing well in US
Exporters started selling via the e-commerce platforms to find a way to tap into growing domestic demand , as a hedge against declining demand and pricing pressures in their export markets . Some of them found a way to create ‘ labels ’ using their product development skills and to gain additional margins , even though they were not quite true consumer brands . However , the rhythm of the two businesses are quite different . Exporters working with retailers and importers in Western markets are more accustomed to working on typically larger volumes per style at one go , besides longer lead times , more planning predictability , relatively lower working capital requirements , etc . Selling on e-commerce platforms has meant being willing to make-to-stock , work with smaller quantities and faster deliveries , and committing working capital in inventory of both raw materials and finished products . Exporters who have succeeded in growing e-commerce sales in the past did so because they usually understood and acknowledged the very different nature of their contract manufacturing export business and the new e-commerce business and were able to invest time and effort in creating a base for the new business . Significant cash reserves from funding in the e-commerce companies meant that payment cycles were also quite stable and getting volumes up was also primarily the responsibility of the e-commerce platforms .
but for some reasons has not succeeded as much in India in clothing ; besides more fashion-driven sites , such as Jabong and Myntra are faring far better in apparel sales . The Government ’ s e-commerce policy is followed more in breach than anything else , especially in the FDA regulations . I therefore think what is more crucial is the implementation of the policy , rather than re-examining the policy itself .
Devangshu Dutta , Chief Executive , Third Eyesight , Gurgaon
However , previously e-commerce growth was pushed by the platforms on aggressive promotions and discounts . With that cooling off somewhat in the last 12-18 months , exporters who have not invested in understanding the nuances of the domestic Indian consumer or are creating their own brand identity , have suffered declining volumes or have even been dropped from the platforms .
On the other hand , some of the larger exporters have become contract manufacturers of private labels to the larger domestic retailers such as Reliance , rather than focusing on e-commerce – the phenomenon is not new ( for instance , Sonal Garments was a contract supplier to the Little Kingdom chain almost 30 years ago ), but there is far more volume available than earlier that makes this a more viable proposition .
www . apparelresources . com | MAY 16-31 , 2018 | Apparel Online India 23