INTERVIEW WITH MR. VIRAJ SHAH, EXECUTIVE DIRECTOR, RUBY MILLS

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INTERVIEW WITH MR. VIRAJ SHAH, EXECUTIVE DIRECTOR, RUBY MILLS

TVC: What has been the trend of consumption of fabrics and garments in the last 5 years?

VS: Fabric consumption is facing a downward trend asdemand for ready-madesis growing in India. Fabric consumption is mostly at B2B level. Indiabeing a diverse country with so many religions, regions and diversity in every state that it is really difficult to map the market for garment brand owners. With a population of more than 100 crores, mapping of correct sizes, shapes, styles, colours, designs, etc. vastly varies in our country.There are 3 types of garment brands in India: Local/Regional brands, National brandsandInternational brands:

·         Local / regional brands are more accurate in their mapping of sizes, as they are aware about consumer tastes, preferences, etc. For ethnic wear, people prefer regional brands/ boutique tailors as they give exclusivity, class andpremium variety to the consumer.

·         National brands focus on mass market and offer basic styling. They meet basic requirements of the consumer and are offered in different sizes and colours which can vary in lots or sometimes per piece too. National brands consume only 2000/3000 metreof fabric per style and colour which is a very low consumption.

·         International brands have arrived in India since few years and many more are coming. Pricing strategy inIndia is very different from international countries. India lacks strategic pricing and products are launchedat sky high prices, if they do not sell at that price then they are sold at discounted rates. Whereas in EU and USA, they launch productsat discounted rates, so it’s mostly affordable. Indian products andprocesses need to change and adapt to compete with international brands.

Garment companies apart from local brands also export to SAARC, Middle East countries without using theirbrand.EU investment came in big numbers in China as it is a global supplier and so China expanded big time and currently largely fulfils world demand.WhereasIndia is mostly a supplier for its own country, so its capacity is not vastly expanded. Indian consumers by and large are not loyal to brands and are mostly price driven.

TVC: Do you think consumers postpone fabric and garment purchases in the years of high consumer prices and purchase more when prices have reduced?

VS: Not really, as pricing is not a matter for purchase. Priority of purchase is life style products like mobile and electronics. Production in our country is more than consumption and hence there are heavy discounts. New garments are mostly purchased by majority of the public in extreme necessities like weddings or festivals. Brand communication induces purchases and brandis nothing but value for money as perceived by the consumer. Brand enticing concepts of western festivals like Father’s day or Mother’s day are picking up and many such days are celebrated and marketedfor selling products.

 

TVC: The present cloth and garment production in the country is USD 120 billion worth, of which exports are USD 40 billion and domestic consumption is USD 80 billion. What do you expect domestic consumption to be by 2015?

VS: Not substantially high and not a big difference either. We are creating our own consumption andwestern world’s consumption capacity is going down. Western world’s8 seasonsare going down to 2 seasons whereas 8 season concept has come to India where every 2 months fashion changes.

 

TVC: There is a fundamental shake up in retail marketing. Apart from brick and mortar stores, e-tailing has captured consumers because of competitive prices and heavy discounts. In e-tailing also, there are various models, some are software companies, providing a platform to manufacturers/suppliers to sell their products. Some hold stocks in their name. There is a problem of taxation in some cases. What are your views on different models?

VS: Development of Online model is expensive;one needsseparate department for same and dedicated personnel as online retailing requires quick response in case of support and queries. Companies like Arvind Mills, Raymond Ltd. have created their own IT department and have started their own online retail platform. They do data capturing, e-tailing and much more. However this is viable only for established brands as many companies cannot afford IT costs, promotional costs, etc.

Since retail system has been established for a long time there is not much difference in marketing andretail mark-upis still at 40 % and mark down at 60 %. GST will be good as allthe problem of dual taxation, vat, octroi, service tax will be out. If implemented in right spirit, black money transactionswill be eliminated, ‘right’ prices will be marked on products and government income will increase by 30%.

 

TVC: We learn that some leading mills and garment manufacturers are starting their own platform to sell their products. Do you think this trend will remain confined to top companies in the field?

VS: Few top corporates are already doing it but one needs minimum volume for e-tailing. Servicecompanies like Flipkart, Snapdeal, etc. are creating platforms and investing money for the same. For mapping data, future trends, research, volume, etc., e-platform is the best. E-tailingreaches to a broader spectrum of consumers, givesfirst-hand information, widensdistribution areas, reduces entire gestation period of getting information, provides day-to-day updates, givesimmediate feedback of new products by likes,dislikes and comments.Retailers also receive feedback from social media with which they can estimate market size and forecast new developments. New products can be launched online and can feel the market immediately with good advertising.Traditional channel partners, distributors, MBO’s don’t give right feedback whereas in online retailing one reaches the consumer directly. B2B will take time in e-tailing as it takes 6-9 months of development. Also fabrics which are essentially B2B productsdon’t sell well online as its feel, look, fibre composition, softness, drape quality are important parameters for selecting and choosing the right fabric.

 

TVC: What is the ideal system of retailing from the point of view of manufacturers and from the angle of consumers?

VS: It is different for different players. For established garment manufacturers, e-tailing is good as brand is established and has recall value with customers. It is a cost and time saving activity.For new brands, e-tailing is tedious and takes a while to pick up. Maintaining constant flow of consumers, enticing consumerswith discounts and novel ideas in this highly competitive market and complex system of distribution is tedious and requires aggressive marketing and takes a lot of effort.Indian consumers are maturing and it is the fastest growing market hence rapid changes are inevitable.For repeat buyerse-tailing is best as it saves time and is less of a hassle.

For fabric manufacturers, e-tailing is good only for awareness purpose but purchase can happen only after touch and feel of thefabrics.Generic fabrics can work for e-tailing for technical individuals who understand weaves, finishes, dyes, composition, etc.

 

TVC:Do you think products like fabrics or garments or home textiles are sold on strength of their feel, drape and fibre composition whereas price and mortal model scores over the rest?

VS: In recent times things have changed. As people are travelling globally and seeing the world, they are getting exposed to different styles, markets, fibres, fabrics and fashion. So for upper segment of society, fibre composition does matter, whereas for the lower strata of society,fibre composition to a large extent and feel to a certain extent does not matter over price.

 

 

 

 

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