Our priority remains to perfect what we already do
Modenik is a progressive and aspirational apparel company with a rich legacy spanning over four decades. Known for its stylish and comfortable essential clothing, Modenik combines future-ready innovation with consumer insight to stay at the forefront of style and comfort. The company is dedicated to evolving every day and turning its vision of being the most preferred brand for essential clothing into reality. In a conversation with Fibre2Fashion, CEO Shekhar Tewari discusses the company’s innerwear business in India.
How have consumer preferences and shopping behaviours evolved in the textile and apparel sector?
Consumer preferences and shopping behaviours in the textile and apparel sector have evolved significantly. Today’s consumers prioritise performance, wellness, technology, and lightness in their apparel choices. They seek products that offer comfort, are technologically advanced, and promote wellness.
One of the most notable changes is the demand for speed. Consumers now expect faster access to products and are unwilling to wait. If a particular brand or product is not readily available, they will quickly turn to other brands or shop online. This shift is driven by the constant bombardment of information and the increasing pace of life, leading to heightened expectations for immediate availability and prompt service.
To meet these evolving expectations, businesses must adapt their strategies accordingly. This means ensuring that products are always available, streamlining supply chains, and leveraging digital platforms to meet the demand for quick and convenient shopping experiences. Planning and execution must be aligned with these new consumer behaviours to remain competitive in the market.
How are international trade policies and regulations affecting the textile and apparel industry, and what steps are companies taking to navigate these changes?
The textile and apparel industry, being labour-intensive, is significantly impacted by international trade policies and regulations. While technology and automation are advancing, the industry still relies heavily on manual labour, particularly in garment stitching and making. This sector remains one of the largest employers in many countries, including India.
Governments are continuously working on labour laws to provide more flexibility in hiring and operations. Some state governments are implementing measures to improve labour conditions, but this remains a work in progress with much still to be done.
Historically, the industry has shifted geographically based on labour cost arbitrage. Fifty years ago, manufacturing hubs were in Europe and North America. Over time, production moved to regions with cheaper labour, such as the Middle East, Turkiye, and Latin America, before shifting to Asia, including China, India, and Bangladesh. Currently, manufacturing is expanding to countries like Myanmar and Ethiopia, following the pattern of seeking lower labour costs. As regions become more prosperous, their costs increase, prompting the industry to move to less expensive locations.
Geopolitical factors also play a crucial role. Tariffs, most-favoured-nation statuses, and trade agreements between countries and economic blocs influence the industry. While these factors are beyond the control of individual companies, they shape the global trade landscape.
India, with its large workforce and significant cotton production, is well-positioned in the textile industry. India is one of the largest cotton growers globally, alongside the US, China, Brazil and Pakistan. This gives India a competitive advantage in raw material availability and manufacturing scale, supported by a sizeable domestic market.
The Indian government is implementing policies to support the textile sector. For example, the Production Linked Incentive (PLI) scheme offers incentives for investments in the industry. Recent changes have lowered the investment thresholds to accommodate smaller units in front-end manufacturing, making it more accessible.
How has Modenik’ s vision evolved since its inception, and what are the primary goals for the company in the next five years?
Modenik, a three-and-a-half to four-year-old company, was formed by the merger of Dixcy Textiles and Gokaldas. Both were proprietor-owned businesses with strong brands. Dixcy Textiles specialised in Dixcy products and held a Levi’s license for Levi’s innerwear and accessories. Gokaldas was the promoter and owner of the brand Enamor. I used to run the Enamor business as the CEO from 2015 to 2019.
Around 2017-2018, Advent, one of the top five private equity players in the world, bought the Dixcy business. The investment thesis was based on the mass consumption nature of the innerwear category, which is directly related to India’s consumption story. Innerwear, being a basic everyday necessity, is not prone to cyclical fluctuations, making it an attractive investment. Advent aimed to invest in businesses with strong brands that needed certain interventions or capabilities to break through and grow. Both Dixcy and Enamor were strong brands in their own right, with Dixcy being a top brand in the men’s and women’s economy innerwear segment and Enamor in the mid-premium and premium segments.
The logic behind bringing these businesses together was to create a portfolio of brands that spans across the value chain for both men and women. Dixcy caters to the economy men’s segment, Levi’s to the mid-premium and premium men’s segment, Enamor to the mid-premium and premium women’s segment, and Slimz by Dixcy to the economy women’s segment. By merging these two companies, Modenik could leverage synergies, scale, and benefit from the strengths of each business.
While Advent’s investment is focused on transforming the business and achieving profitability within a five to seven-year horizon, Modenik’s vision goes beyond profit and loss. The company aims to find a larger purpose and soul, ensuring it evolves with a broader mission in mind.
In the next five years, Modenik’s primary goals are to continue leveraging synergies between the merged businesses, innovate in design and technology, and maintain its position as a preferred brand for essential clothing. The company is committed to evolving every day, meeting the changing needs of its customers, and turning its vision into reality.
How do you get people more engaged, particularly the younger generation?
When we embarked on this journey, we took outside help to craft our company’s vision and mission. The core idea is that everyone desires to do better tomorrow than they are doing today in their personal lives, professional lives, and relationships. We recognised that everyone aspires to an elevated lifestyle, and our goal is to partner with consumers to help them achieve this.
Innerwear, being closest to the body, plays a crucial role in one’s confidence and performance. Comfortable, high-quality innerwear boosts body language and confidence, helping individuals look and feel better both psychologically and physically. We aim to support our consumers in this journey, partnering with them to enhance their lifestyle through our products.
To engage stakeholders, including the younger generation, we focused on integrating the strengths of the two businesses that formed Modenik. Dixcy Textiles and Gokaldas brought together a range of attributes, from Dixcy’s vast scale to Enamor’s sophistication and design sensibility. While the brands remain distinct, as a company, we leverage the best practices from both to create a synergistic effect, making the whole greater than the sum of its parts.
For instance, Dixcy’s extensive distribution and market speed complement Enamor’s consumer-focused approach. This blend helps us keep pace with the ever-evolving consumer preferences, especially those of the younger generation. By combining Dixcy’s product-led business model with Enamor’s consumer-led strategies, we aim to harness the best of both worlds. This merger enables us to scale effectively and meet the dynamic needs of our consumers, fostering greater engagement across all demographics.
What are the brands working on in their campaigns, especially regarding Dixcy and Enamor, targeting Gen Z?
Dixcy has recently launched a new campaign aimed at the Gen Z demographic. As an economy to popular segment brand, Dixcy recognises that India is still a relatively young country, with a median age shifting to the late twenties. Many young people have entered the workforce in the last four to five years or are just starting their careers. With India poised to be a significant engine of growth for the next two decades, there is a palpable energy and aspiration among its youth.
The Dixcy campaign taps into this energy, targeting young individuals who are challenging established norms. Historically, success in India was often associated with English-speaking backgrounds, metro cities, and privileged upbringings. However, the campaign uses cricket as a metaphor to highlight how success today transcends these barriers. Cricket unites India across all regions and languages, symbolising how talent and hard work can achieve greatness regardless of one’s background.
The campaign emphasises that true confidence and success come from within. It portrays innerwear as the first thing worn in the morning, boosting confidence and setting the tone for the day. The ads capture the essence of young India, promoting the message that external trappings like language proficiency or social status do not define success. Instead, it is the inner confidence and capabilities that matter most.
Enamor, on the other hand, caters to a different demographic—primarily mid-premium to premium segments. These consumers are more evolved, have access to other premium brands globally, and often value higher-order needs. For them, product quality is a given; what matters more is the brand’s messaging and social relevance. So, Enamor campaigns focus on themes like sustainability, gender neutrality, and contemporary social issues.
Since 2013-2014, Enamor’s tagline has been ‘Fabulous As I Am’, promoting the idea that beauty is not just physical but intrinsic. Unlike many brands that focus on physical attractiveness, Enamor emphasises personal empowerment and acceptance. Its campaigns feature diverse models of different sizes, skin tones, and ethnicities, celebrating individuality and self-acceptance. The latest campaign continues this ethos, merging product innovations with the evolving perspectives of modern consumers.
How are you leveraging technology and innovation to stay ahead in the textile and apparel industry?
Performance is crucial for any product, including those in the textile and apparel industry. Over the years, the definition of performance has evolved. Previously, it focused mainly on comfort and security, especially for women’s innerwear, providing an additional layer to help them through the day. Today, performance encompasses various aspects, such as the type of fabrics and the specific activities they support.
For instance, if someone is going to the gym, they need fabrics with wicking properties for absorption and support during vigorous activities. In a hot country like India, breathability and antibacterial properties are essential for innerwear, ensuring it remains odour-free and hygienic throughout the day. These innovations have been around for some time, but the complexity and effectiveness of these technologies continue to improve.
Modenik is also venturing into wellness and sustainability. This includes using fabrics like bamboo, which promote both physical and mental well-being. Wellness, in this context, also ties into sustainability, where the focus is on brands that engage in practices beneficial to the environment and the community. This includes using organic cotton, adopting eco-friendly dyeing processes, and ensuring overall sustainable practices.
Another trend is the emphasis on lightness, particularly in innerwear, which can often be restrictive. This is especially relevant for women’s lingerie, such as bras. Technologies like seamless and bonded garments are becoming popular, providing comfort and ease of movement. Advances in fabrics, including man-made materials like polyamides and polyesters, have improved significantly. Once considered inferior to cotton, these materials now offer excellent performance, hand feel, lightness, and breathability due to new technologies.
Overall, Modenik, like many other brands, is continually innovating to enhance performance, wellness, and sustainability in its products. By staying at the forefront of these technological advancements, Modenik ensures it meets the evolving needs of its consumers and maintains a competitive edge in the industry.
With a vast array of products, how do you ensure quality across your different brands and ranges?
There are two main aspects: absolute quality and price value. Absolute quality means there can be no fundamental flaws, such as holes in a garment, regardless of the price. Price value, on the other hand, is about meeting or exceeding customer expectations for the given price point.
Consider a roadside eatery compared to a fine dining restaurant. At a roadside eatery, the expectation is a clean, wholesome meal without any frills. However, the meal must still meet basic standards of cleanliness and wholesomeness. As you move to fine dining, the expectations include not just the quality of food but also the ambience, cutlery, and overall experience, which justifies the higher price.
For Modenik, this translates to different strategies for different brands. For Dixcy, an economy brand, the focus is on providing a very good product at an efficient price point. This means ensuring the product meets basic quality standards consistently.
In contrast, for Enamor, which targets a higher-end market, everything is dialled up a notch. This includes more intricate product details, better packaging, and additional touchpoints. The quality parameters remain high, but the presentation and experience are enhanced.
Consumers understand that a product priced at ₹100 will be different from one priced at ₹500. The higher price includes both tangible elements, such as the physical product, and intangible elements, such as the brand value. Investing in the brand allows Modenik to charge more and create long-term emotional connections with customers, making it harder for them to switch to other brands.
For Enamor, the emphasis is on continuous innovation and differentiation. The focus is on what can be done differently or better than competitors. For Dixcy, akin to an Udupi restaurant, the goal is to provide consistently good, wholesome products at the right price every time. This consistency builds trust and loyalty among consumers.
Could you share some success stories of how real-time consumer insights have directly influenced a product launch or modification?
Certainly, let me share a story about Enamor, a brand we are particularly proud of for its numerous firsts in the Indian lingerie market. In the early 2000s, the vision for Enamor was to elevate lingerie in India to match international standards. Back then, buying lingerie in India was often a painful experience for women. Those who had access to international travel would stock up on premium brands from abroad, while others had to settle for whatever was available locally.
Enamor has pioneered many innovations in this segment, driven by our passion for listening and talking to consumers. We engage deeply with our customers through initiatives like the ‘Style Studio’, an extremely successful exercise held for five to six weekends every year during the festive season. During this time, our team, including senior leadership and women in managerial roles, go out to retail counters and engage directly with consumers.
This initiative is not about selling but about understanding our customers’ needs and preferences. We talk to around 7,000 to 10,000 women each year, discussing everything from their likes and dislikes to what occasions they need lingerie for and what they find uncomfortable. These conversations, often lasting 15-20 minutes, provide rich insights into consumer behaviour and preferences.
For example, we discovered many women were unaware of the different types of bras available or how to properly fit themselves. This led to educational conversations and, ultimately, the development of products tailored to specific needs, such as full-figure bras and sports bras. The insights gathered from these interactions are synthesised and used to drive product innovation and development.
We also receive heartfelt feedback from customers, which we refer to as ‘consumer love’. Women often write to us, expressing how our products have positively impacted their lives, making them feel more comfortable and confident. This feedback is a testament to the importance of connecting with consumers and understanding their needs.
Our approach ensures that our products are not only functional but also deeply appreciated by our customers. By institutionalising consumer engagement into the DNA of the company, we continuously create products that resonate with our customers and meet their evolving needs.
How has Modenik optimised its supply chain to maintain efficiency and reduce costs?
To answer this, I will go back to the COVID-19 pandemic, which fundamentally changed our approach to supply chain management. Before COVID-19, we took many things for granted and never anticipated disruptions of such scale. When the pandemic struck, Enamor, based in Bangalore, and Dixcy, based in Tiruppur, experienced significant challenges. Dixcy’s entire supply chain was located in Tiruppur, while Enamor sourced 70-80 per cent of its manufacturing from Bangalore, with the remaining 20-30 per cent coming from places like China, Bangladesh, and Sri Lanka. The pandemic caused everything to come to a halt, with certain parts of India, such as Maharashtra, Karnataka, Tamil Nadu, and Kerala, being more severely affected.
During this period, we realised the need to de-risk our supply chain geographically to be better prepared for any future disruptions. Over the last two to three years, we have expanded our geographic footprint for both manufacturing and warehousing. We opened facilities in Kolkata, Central India, and Delhi. While this move was more about de-risking rather than immediate cost efficiency, it offers several long-term benefits. It reduces the risk of a complete halt in operations, improves our ability to supply products, and ultimately enhances sales, as lost sales represent a significant loss.
Additionally, this geographic expansion brings us closer to consumers in different markets, improving our speed to market. Over time, as we achieve higher volumes, cost efficiencies will also come into play. Beyond geographic diversification, we have implemented various measures to improve efficiency. These include industrial engineering enhancements, better machinery, improved processes, employee training, and increased automation in repetitive tasks where machines can perform better.
One of the critical areas we focused on is reducing absenteeism, which significantly impacts efficiency in the labour-intensive apparel industry. In a production line, such as an 18-machine line for bras, even the absence of two operators can disrupt the entire line. To address this, we have implemented incentives, improved canteen facilities, and created a better work environment to ensure our employees are happy and motivated to work. These measures collectively help us optimise our supply chain, maintain efficiency, and reduce costs while ensuring that we are better prepared for any future disruptions.
How do you ensure compliance and safety in your manufacturing facilities, especially in diverse geographical locations?
At Modenik, we follow a rigorous approach to ensure compliance and safety across all our manufacturing facilities. This starts with establishing comprehensive Standard Operating Procedures (SOPs). These SOPs define our best practices and safety protocols, which are then implemented and regularly updated.
We prioritise training and sensitising our staff to these SOPs. Many of us come from backgrounds with international brands where compliance and safety are non-negotiable. We adhere to extensive social and safety compliance measures, and these are embedded into our company culture.
Our approach includes both internal and external audits to ensure adherence to these standards. For every manager, one of their key performance indicators (KPIs) includes compliance and audit results. This means that any major or critical findings in compliance can result in penalties, ensuring that everyone takes these protocols seriously.
The process begins with creating detailed SOPs that outline best practices and desired outcomes. Managers and staff are then trained on how to implement these practices effectively. For example, in our warehouses, we have strict guidelines that forbid lifting anything over 50 kg manually, requiring the use of forklifts instead. This is to prevent inhumane working conditions.
We also have strict hygiene and facility standards. For every 30 employees, there must be one toilet, which is regularly checked and maintained. In facilities with women employees, we provide additional support such as a creche. At Dixcy, for example, we run a Montessori school for employees’ children, complete with a teacher and CCTV monitoring to ensure safety and engagement.
Additional measures include having a doctor on call, regular machine safety checks, safety weeks, and fire drills. These activities help to maintain a high level of safety awareness among employees. We ensure these practices are not just implemented but are also regularly monitored and enforced.
By incorporating these measures and regularly reviewing and updating our processes, Modenik ensures that compliance and safety are maintained at the highest standards across all our manufacturing facilities, irrespective of their geographical location.
Are there any plans for geographical expansion or diversification of product lines in the near future?
We already offer a very expansive array of products. Our products are basic necessities that everyone needs daily. While items like sarees, suits, or formal shoes are worn on special occasions, undergarments are essential every day. This inherent demand means there is still tremendous potential for growth within our current product lines.
Expansion into new categories typically occurs when a business has saturated its existing market. For us, there is still a long way to go before we reach that point. We have a vast business across men’s and women’s segments and various price points, so our primary focus is on excelling in our current offerings.
However, we continuously evaluate opportunities and identify gaps where new technologies or categories could enhance our product range. While we are open to exploring new avenues, our priority remains to perfect what we already do and maximise our existing potential. There is still significant growth ahead within our core business before considering broader diversification or geographical expansion.
How is Modenik approaching digital transformation, and what impact has it had on your operations and customer interactions?
Digital transformation at Modenik is not seen as a standalone initiative but as an adaptation to where technology, times, and consumer behaviour are heading. Twenty to thirty years ago, the focus was on department stores and malls, then exclusive outlets, and now the digital realm driven by the internet and mobile technology. We evolve our strategies to align with where the consumer is going.
Our approach to digital transformation involves understanding its impact and developing necessary capabilities. For many of us who started our careers before the digital era, this transition requires significant adaptation. We recognise that today’s consumers are inherently digital, so we must build those capabilities within our system and train our people accordingly.
We have taken several steps to enhance our digital competencies. For instance, to build our e-commerce business, we partnered with Bain Consulting and BCG. They helped us understand the digital landscape, create the necessary infrastructure, develop competencies, and provided support during the initial phase. This comprehensive approach has been crucial for our online business.
Digital transformation also includes basic skills like proficiency in Excel and presentation software, which are essential for daily operations. Despite seeming basic, these tools are used extensively. Just as many features of an advanced smartphone go unused, in business, it is the fundamental digital tools that often have the most significant impact.
At the manufacturing and business levels, we have implemented systems like SAP to enhance productivity. This requires not only the installation of new software but also extensive training for our employees to unlearn old methods and adapt to new, more efficient processes. Implementing SAP, for instance, has been a multi-year effort involving significant training and changes in our ways of working.
In our sales operations, we are digitising processes by introducing tools like Sales Force Automation (SFA). Providing our salespeople with handheld devices has significantly increased efficiency, allowing them to take orders and manage sales processes more effectively.
Overall, our digital transformation efforts span across various aspects of our business, from manufacturing to sales. By continuously training our staff and integrating new technologies, we ensure that Modenik remains agile and responsive to the evolving digital landscape, ultimately improving both our operations and customer interactions.
Finally, what important lessons should aspiring startups keep in mind?
For aspiring startups, there are several key lessons to keep in mind. First and foremost, it is crucial to thoroughly understand your target segment and their needs. Speak to your potential consumers and identify what problems you are solving for them. Your product or service should offer something differentiated. If you are providing a solution that stands out, you will have a stronger chance of success. If your offering is not unique, ensure that it is significantly faster, more efficient, or cheaper than existing solutions. This is what e-commerce has done—providing convenience and speed that consumers appreciate. Your value proposition should be clear and compelling.
Additionally, you must be passionate about what you do. Starting a new business takes a lot of effort and resilience. Be prepared for the challenges and the dedication required to succeed. It is important not to be under any illusion about the hard work and commitment needed.
20230103183907.png)
