NEW DELHI: Several international fashion brands such as Cadini, DKNY, Gant and Boggi Milano, which have been importing their entire merchandise for India, have started sourcing apparels locally to become more competitive and profitable in a booming market.
By shedding inhibitions towards sourcing from within the country, these brands can significantly cut down tax outgo and reduce production costs by about 20%, helping them to reduce prices and reach the market faster, say analysts.
Local sourcing will help companies do away with import duties, which are as high as 40% on apparels, and save on longer supply cycles, says Harminder Sahni, managing director of consultancy firm Wazir Advisors. “Besides, they can either bring down prices or make extra margins equal to the amount of customs duty,” he adds.
Donna Karan New York, or DKNY, already source about 6% of its merchandise from the country, says Ashesh Amin, president – apparel and retail at S Kumar’s Nationwide, which has the global franchise for DKNY menswear in all geographies except Japan.
The US-based clothier Hartmarx Corp, which S Kumar’s acquired in 2009, sources merchandise worth about Rs 40 crore from India. The company, which shot into fame for designing a suit for US president Barack Obama, plans to increase its sourcing base in India further in next two years.
“Local sourcing is beneficial to us; it offers higher margin and better time-to-market,” says Mr Amin. “We are expecting additional business of over Rs 800 crore this fiscal on the back of local sourcing.”
Arvind Brands, a subsidiary of textile firm Arvind Mills, is in talks with the UK-based premium lifestyle brand Gant to start sourcing its merchandise in India. Gant currently imports the entire collection for sale here.
The firm is also set to launch Italian menswear label Energie in India, which will have 75% of its merchandise sourced locally, says J Suresh, CEO of the Rs 230-crore Arvind Brands.
The company already has a local sourcing model in place for its other international brands such as Arrow, Izod, USPA and Cherokee that are buying merchandise from suppliers in Bangalore, Chennai, Delhi and Ludhiana.
However, the international brands are playing safe while choosing suppliers in India after UK retailer Marks & Spencer severed ties with one of its local suppliers following allegations of unfair practices.
Anand Nair, brand head of Boggi Milano, says, “We are carrying out intense screening procedures to ensure that our Indian suppliers match our quality standards and working conditions.”
DLF Brands, the retail arm of top real estate firm DLF, retails the Italian premium menswear brand in India.
Marks & Spencer Reliance India, the joint venture between Mukesh Ambani-run Reliance Industries and the UK retailer, had recently announced plans to increase sourcing from India to more than 70% from about 40% now.
One of the earlier entrants to the domestic market, United Colors of Benetton sources its entire range locally.
Other than the tax savings, another factor driving fashion brands to India is the rising labour costs in China, say analysts. Recent labour unrest in places like Indonesia, Cambodia and Vietnam too may work in favour of India.
Most these brands have no immediate plans to source merchandise for their global operations from India, but will integrate their India supply chain with their global distribution network in the long term.
Blues Clothing, which has licence to retail Italian fashion labels Versace, Corneliani and Cadini in India, plans to leverage its source base is India for global operations soon. The company is currently sampling few export-oriented factories to source merchandise for premium menswear brand Cadini, according to its MD Abhay Gupta.
Brands such as Boggi Milano and Cadini, which import 100% of their merchandise, feel that local sourcing will help them expand faster.
“Local sourcing will certainly improve our logistic and supply chain, and the pace of expansion will improve,” says Mr Nair of Boggi Milano.
International brands are estimated to account for nearly 20% of the Rs 32,000-crore Indian organised branded apparel market, which is growing at 15-20% a year.
Source:29 SEP, 2010, 12.00AM IST, DURBA GHOSH & PRAMUGDHA MAMGAIN,ET BUREAU
Tags:Abhay Gupta, Anand Nair, Asesh Amin, Blues Clothing, Boggi Milano, Cadini, DKNY, DLF Brands, energie, Gant, Hartmarx Corp, J Suresh, UCB
Wednesday, September 29, 2010
Wednesday, September 15, 2010
Luxury Brands Selling Through Home Visits
NEW DELHI: Centuries ago, India’s rich and famous liked to buy their luxuries at home. Rich silks and gold and silver jewellery were taken by the merchants to the homes of kings and landlords, where men and women picked their objects of desire within the privacy of their homes.
Now, global luxury brands are finding value in tapping the same route to sell their product lines in the Indian market. “We are actively tapping this new format, where we offer our clients the luxury of shopping at home. We call them Trunk Shows. In fact, between 30-40% of our sales in India are currently from the home visits,” says Prasanna Bhaskar, regional director of Italian luxury brand Salvatore Ferragamo.
Dolce & Gabbana, Ferre, Trussardi and Lladro are all achieving about 15-20% of sales in India through the ‘home visit’ route. The conversion factor through this channel for most brands is very high and transaction values have also been relatively higher. Many of the luxury brands in India are now using this route not just for discounted sales, but also for their newly-launched products.
Big brands are now realising that because most rich clients are hard-pressed for time, this often acts as a convenient option for them. “We serve many of our rich clients through the personal viewing of merchandise channel. It is far more convenient when the merchandise is viewed at a place of their choice rather than at the store,” says Puneet Khanna, director of Epoca, which retails brands such as Dolce & Gabbana, Ferre and Trussardi in India. This way, the company is able to service them with cent per cent personal attention. The modus operandi maybe relatively expensive, but it gives the companies a leverage to approach the right customer, with appropriate merchandise, rather than wait for them to visit the store.
For Lladro, the Spanish handcrafted porcelain brand, home visits are the best way to sell very personalised pieces of art, and help clients to match the pieces with their home décor. The company has been visiting clients at home since 2002, and this channel now comprises an important part of the overall Indian business. Says Amar Aggarwal, managing director of Spa Group, which has a collaboration in India with Lladro, “At least 15% of our sales come via this route. In fact, in the cities where we are not present, we even make trips to visit customers on special request.”
Like Lladro, the ‘trunk show’ is also helping many other luxury brands to tap markets in various cities where they don’t have stores such as Hyderabad, Jaipur, Ahmedabad and Jalandhar. This is also as many wealthy Indian families prefer personalised service in the privacy of their homes over and above visits to upmarket retail outlets. “There are many well-travelled customers in such cities who we are reaching out to through home visits. In fact, our marketing team in Mumbai spends at least fifteen days a month doing such visits. This is working all the more in India because the cost of setting up retail infrastructure is very high,” says Bhaskar.
Other luxury brands, too, are introducing themselves in cities where they don’t have a retail presence through the experiential private showing route. “When we do not have retail presence in a particular city, Alfred Dunhill introduces the brand and its heritage by a private showing where our potential customers are invited to experience the brand,” says Anjani Kasliwal, director of SKNL, which is the exclusive franchise for the brand in India. She adds that the ‘shopping at home’ concept is very well received among corporate chieftains who are short of time and prefer their homes for selecting clothing and lifestyle products.
Tags:Dolce and Gabbana, Ferre, Trussardi, Lladro, Salvatore Ferragamo, Epoca, Spa Group, Amar Aggarwal, Alfred Dunhill, Anjani Kasliwal, international franchise
Source:12 SEP, 2010, 12.21AM IST, ISHANI DUTTAGUPTA & NEHA DEWAN,ET BUREAU
Now, global luxury brands are finding value in tapping the same route to sell their product lines in the Indian market. “We are actively tapping this new format, where we offer our clients the luxury of shopping at home. We call them Trunk Shows. In fact, between 30-40% of our sales in India are currently from the home visits,” says Prasanna Bhaskar, regional director of Italian luxury brand Salvatore Ferragamo.
Dolce & Gabbana, Ferre, Trussardi and Lladro are all achieving about 15-20% of sales in India through the ‘home visit’ route. The conversion factor through this channel for most brands is very high and transaction values have also been relatively higher. Many of the luxury brands in India are now using this route not just for discounted sales, but also for their newly-launched products.
Big brands are now realising that because most rich clients are hard-pressed for time, this often acts as a convenient option for them. “We serve many of our rich clients through the personal viewing of merchandise channel. It is far more convenient when the merchandise is viewed at a place of their choice rather than at the store,” says Puneet Khanna, director of Epoca, which retails brands such as Dolce & Gabbana, Ferre and Trussardi in India. This way, the company is able to service them with cent per cent personal attention. The modus operandi maybe relatively expensive, but it gives the companies a leverage to approach the right customer, with appropriate merchandise, rather than wait for them to visit the store.
For Lladro, the Spanish handcrafted porcelain brand, home visits are the best way to sell very personalised pieces of art, and help clients to match the pieces with their home décor. The company has been visiting clients at home since 2002, and this channel now comprises an important part of the overall Indian business. Says Amar Aggarwal, managing director of Spa Group, which has a collaboration in India with Lladro, “At least 15% of our sales come via this route. In fact, in the cities where we are not present, we even make trips to visit customers on special request.”
Like Lladro, the ‘trunk show’ is also helping many other luxury brands to tap markets in various cities where they don’t have stores such as Hyderabad, Jaipur, Ahmedabad and Jalandhar. This is also as many wealthy Indian families prefer personalised service in the privacy of their homes over and above visits to upmarket retail outlets. “There are many well-travelled customers in such cities who we are reaching out to through home visits. In fact, our marketing team in Mumbai spends at least fifteen days a month doing such visits. This is working all the more in India because the cost of setting up retail infrastructure is very high,” says Bhaskar.
Other luxury brands, too, are introducing themselves in cities where they don’t have a retail presence through the experiential private showing route. “When we do not have retail presence in a particular city, Alfred Dunhill introduces the brand and its heritage by a private showing where our potential customers are invited to experience the brand,” says Anjani Kasliwal, director of SKNL, which is the exclusive franchise for the brand in India. She adds that the ‘shopping at home’ concept is very well received among corporate chieftains who are short of time and prefer their homes for selecting clothing and lifestyle products.
Tags:Dolce and Gabbana, Ferre, Trussardi, Lladro, Salvatore Ferragamo, Epoca, Spa Group, Amar Aggarwal, Alfred Dunhill, Anjani Kasliwal, international franchise
Source:12 SEP, 2010, 12.21AM IST, ISHANI DUTTAGUPTA & NEHA DEWAN,ET BUREAU
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