Investing in Fashion
The Indian consumer has never had it better. With the entry of Indian retail chains like Reliance, Big Bazaar, Pantaloons, Trent Ltd., etc., there’s no limit to the choices that they have when it comes to fashion. But the icing on the cake is yet to come. The government may soon allow 51% foreign direct investment in multi-brand retail in India. Needless to say, this will see a lot of big brands from abroad dropping anchor in the country. But now that this part of the FDI (Foreign Direct Investment) proposal has come around, 100 percent investment in single-brand retail will be possible, opening up Indian doors for many foreign fashion brands. With so much happening on the FDI front, it was only natural that we would think about how it would affect the Indian fashion consumer, designers and retailers. The outcome will be positive, experts say. Here’s why:
Reaching out to one and allThere are currently lots of foreign fashion brands that aren’t available in many Indian cities. With FDI coming in, single-brand retail will reach all cities with a population of one million, which could see some smaller cities like Dhanbad, Jodhpur and Vijayawada also being dotted with high-end fashion stores. And once big-box stores like Walmart, Tesco and Carrefour settle in, they are sure to attract other retailers from their respective countries.
Local designers will evolveCritics are worried that with so many global brands making a foray into the Indian market, the diminutive local stores and smaller bazaars may get wiped out due to competition. But, Rajendra Kalkar, senior centre director of The Phoenix Mills Ltd., says, “Every shopping mall or big-box store that comes in has a good mix of local, regional, national and foreign brands.” A mall cannot do well if it ignores any of these. So, various regional arts like chikan embroidery from Lucknow, kantha work from Kolkata and madhubani painting from Jharkhand are likely to find a place in the form of apparel in these stores, giving small-time designers a chance to grow. Plus, every store has its own loyal followers. “If my local store satisfies my fashion needs, I may not venture out to those big brands very often,” says Ranchi, India-based Seema Mahto. The fact that there are still many Indians who prefer traditional Indian wear will also keep these shops running. In keeping with the FDI proposal, all foreign brands looking for 100 percent investment in single-brand retail will now have to source at least 30 percent of their future products from small and medium Indian enterprises, artisans, craftsmen and cottage industries. The local sourcing of material, designing, tailoring, etc., by these foreign retailers is sure to benefit those involved and the country as a whole.
The fashion quotient will rise“Growing options for the consumer in the fashion sector are raising her general fashion consciousness,” says fashion designer Gaurav Gupta. (Who would have thought that our grannies and aunts would someday make the paradigm shift from saris and salwar suits to tunics, stockings, trousers and shirts?) With global travel becoming a passion for the average Indian, there has been an enormous change in awareness about all things Western, and fashion is at the top of the list. Today, brands like Marks & Spencer and H&M are not alien to Indians anymore. If FDI happens, the buyer will happily exercise his options before making a purchase. And why shouldn’t she? More brands would bring in more big-box stores and shopping malls, which are infrastructurally sound.
Fashion designers may need to rework their prices“Competition would depend on what segment of the playing field you exist in,” says fashion designer Namrata Joshipura. “At the high street level, there will definitely be price pressure,” she adds. Many fashion designers have price ranges that are globally competitive as they compete with the best global brands. Gupta classifies the Indian shopper into two categories. “There is a more fashion-driven customer who is ready to pay anything for a designer brand and there is another who wants to get the best fashion for their money,” he says. “This leaves us to have a more prêt price-conscious range besides our regular line, now that the competition is likely to go up,” he says.
There’s space for everyoneThere was a time when Indians preferred international labels and brands. “But as we’re growing as a nation, we’ve begun to take more pride in everything Indian, especially when our own designers are becoming an international names to reckon with,” says Neha Sachar Mittal, joint director for Kidology, a designer label for kids. “More so because Western styles by Indian designers nowadays have an international look and feel,” she adds. “For some people, however, brands dictate power,” says noted couture, prêt and bespoke designer, Gavin Miguel. “International brands are global and make the buyer feel even more powerful, especially when the person in question has built himself up from scratch.” Another silver lining is the evolving Indian retail market. “Retail in India is still maturing, so bringing in new players will only help it grow,” says Kalkar. “For the next 10 to 15 years there will be no negative effect of new brands entering the Indian market,” he adds. All those who offer quality, can withstand competition and still grow, will succeed. The rest will perish whether they are Indian or international.
BY PRITI SALIAN / PUBLISHED IN THE BEAUTY ISSUE, SPRING 2012