Interview with Ruchi Sally

India is one of the growth markets in the world, and online retailing industry is amongst the fastest growing segments. Unique propositions that attract consumers online are low prices or discounts and convenience. Discounting strategy that most of the e-commerce players have adopted, has led to disruptive sales offline. On the contrary, brands feel that a marketplace model in online space dilutes brand visibility and image, enabling brands only to sell the product as a commodity amongst 800 brands in the single market place. The cost advantage that enabled the online market seems to be diminishing with high maintenance costs, logistics and commissions. Nevertheless, there are exclusive online stores that have a premium positioning and are likely to sustain. The offline or traditional market will continue to be one of the most promising modes for brands to provide brand visibility, to connect with consumers, provide experiences, differentiate brand positioning, establish the desired brand image, generate promising sales and maintain consistency in a controlled selling environment. With most retailers now offering an exclusive range of products to online partners, this conflict between online versus offline has been, for the most part, taken care of. Our research team experts believe that physical store presence is a key to brand visibility and promising customer base.

The global apparel and fashion retail industry is approximately around US$ 1.7 trillion, and India's share is approximately US$ 110 billion. In India, the apparel and fashion industry is contributing significantly to the economy, providing about 14 per cent to industrial production, 4 per cent to Gross Domestic Product (GDP) and 17 per cent to the country's export earnings. It provides direct employment to over 35 million people. Given the sheer size and population, India ranks fourth among the largest market for apparel and fashion industry, growing at a CAGR of 12 per cent, the highest growth rate vis a vis other economies.

Elargir Solutions, one of the leading retail consulting companies, has been advising marquee companies and brands in this niche segment - retail. With growth in the retail sector, we have seen promising opportunities and outcomes for the company during the last two years. We are covering two most important retail markets of Asia - India and Singapore --- apart from our presence in the United Kingdom and Europe. We established our Singapore office this year, and have entered into a joint venture arrangement with a United Kingdom-based company to help global brands enter potential markets like India and help Indian companies grow and increase their reach into these economies. The United Kingdom and Singapore markets are fairly established and advanced in their retail space, and help us in covering the retail sector of the United Kingdom, Scandinavian countries and Europe efficiently. At the same time, we get the best practices and investments from mature markets that are very much required for the Indian economy.

The apparel and retail fashion industry was growing at a CAGR of 12 per cent in India during FY 2012 to FY 2015. Considering the increasing demand pattern for global brands and fashion-conscious consumers, new entrants like H&M and Gap entered India. This trend was further bolstered by relaxation in the FDI norms, like single-brand FDI acceptability. The industry promises to grow at an accelerated pace. Further, the macro-economic trends, including low inflationary impact and high GDP growth rate further provide more disposable income at the hands of the working population and accelerate the industry growth. This growth trend has been a bit subdued on account of the depreciating Indian rupee that makes import all the more expensive.

I would say that data and trend are among the important factors for the growth of the retail fashion industry. While developed economies have fine-tuned data capture, developing economies like India find it a bit difficult to capture data and forecast trends. The other challenge, with the advent of globalisation of the Indian economy and entrance of MNCs, is logistics management. In a country like India, it is not easy to forecast and manage the Just-in-Time inventory solutions that are the cornerstones of success of the global fashion and retail industry. Other factors closely linked to the above issues are: optimal inventory levels, scalability and changing demand patterns. This industry is highly competitive, and brands are fighting for the same luxury disposable income of the consumers. The sustainable strategies in this industry are change and constant innovation. Change is the only constant that can pull revenues and provide foundation for growth. Companies must innovate with new products, understand the demand-supply patterns very carefully while forecasting, plan on revenue maximisation strategies by maintaining optimum inventory cycles and ensure scalability and visibility.

Elargir Solutions looks forward to contribute significantly in the retail advisory to global brands entering India and Indian companies scaling overseas. We see ourselves to be one of the preferred advisors bringing best practices, supporting strategic tie-ups of brands and companies and managing their needs to enter and sustain in such markets.

Human resources are the most important part of an organisation and hiring a suitable resource is the key. Having resources who understand the vision of the company and synchronising their efforts towards the goals, even if they are hired to do a task or activity, are assets. They must be retained and taken care of. We, at Elargir, believe employees treated well, take good care of customers. Recognising and rewarding employees on performance, creating opportunities for them to showcase their talent, supporting them on wages and salary, training them and having a healthy relationship with them are extremely important and indispensible for a healthy company.