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Photo: K. Gajendran

Mass appeal Western wear accounts for only two per cent of the market share

The largely untapped Indian consumer base has become the latest target of foreign retailers. “We believe in the country and the potential it has to grow,” said Troels Holch Povlsen, Chairman, Best Seller. The group’s men’s apparel brand Jack & Jones will hit the Indian market this year.

However, B. Nagesh, Managing Director, Shopper’s Stop, commented at the CEO’s Conclave if people’s spending power has increased, and the market too is growing, why are many retail organisations not registering profits?

Plenty of reasons were offered. For a country that is as diverse as India, it is difficult for a marketer to have one common strategy. And concepts that click with people abroad are not necessarily applicable to Indians as well. Said Aaron Boey, Managing Director, Levi’s (Asia Pacific), “Indians don’t like fashion to be thrust upon them.”

Kishore Biyani, CEO, Future Group, seconded this thought. “Designers look westwards for inspiration but the need is to look inwards. We have to take into account the aspiration of the small town.” Numbers only substantiated the contention. Ireena Vittal, Head, Retail Practice, Mc Kinsey & Co, pointed out how when it came to women’s wear, 60 per cent of the market share was still with the sari, 38 per cent women still bought churidar or salwar-kameez, while western clothes held only two per cent of the share.

This pointed to the issue of lack of innovation in blending Indian tradition with clothes. An example was the concept of indo western clothes that took the country by storm a couple of years ago only to die a slow death.

“People don’t buy brands, they buy an identity. Brands have to change themselves before people do if they want to survive,” D. Shivkumar, Managing Director, Nokia India, said.

Experts said sales are another spoiler. “We are making shoppers turn into bargain hunters. This will harm the industry over a period of time,” warned Ireena. The rise in real estate prices and high entry taxes for foreign brands were other reasons mentioned for the retail industry not flourishing.

But beyond these, delegates felt, there were bigger factors retailers needed to look into. While most retailers are looking to sell their products to tier I of the Indian population, it comprises only 11 per cent of the people.

The big chunk of 55 per cent falling under the second tier — the middle class— remains untapped. Is the real reason the lack of a mass spectrum apparel brand that cuts across backgrounds? The speech by EVKS Elangovan, Minister of State, Ministry of Textiles, echoed a similar feeling. “Can fashion be in reach of everyone? Can a ‘Nano’ happen in the fashion business?” he asked.

But it was not all grim talk. There were success stories like Koutons, which have tapped the right market and recorded a growth rate of 142 per cent over five years.

“There is a market of 400 million waiting to be tapped. With a good quality product at the right price, our aim is to reach out to India like the Indian post office system,” said DPS Kohli, Chairman, Koutons.

The industry representatives were confident the inconsistencies could be dealt with over a period of time, as Indian retail is still at a nascent stage. “Just give us a little time,” said Sanjeev Agrawal, CEO, Pantaloons.

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