Specialty brandwagon
Brands set up their own retail outlets as they make a beeline for the aspirational small towner.
Meerut housewife Anjali Sharma visited a Van Heusen store in New Delhi about two years ago to shop for her brother's wedding. Impressed by the fi ts and the variety on offer, she bought suits and trousers worth Rs50,000. She is now a frequent customer at the Van Heusen outlet in Meerut, which opened last year. "Though their rates are a bit steep, I like their fi ts that require no alteration," says Sharma.
It is customers like Sharma who are driving Van Heusen's growth story in India, especially in towns like Meerut. In a peak month like November, it is estimated to have notched up sales of Rs23 lakh. "The store is slowly inching towards sales of Rs1 lakh a day," beams Shital Mehta, COO, Van Heusen. The brand from Madura Garments diversifi ed its India game plan last year, entering into casuals and denim wear, and aggressively penetrating towns like Meerut, Kota, Sri Ganganagar and Nanded in a bid to drive growth. It is dreaming big now, with plans of reaching the top 100 towns over the next two years. "The market is evolving thanks to farm loans and waivers in rural areas and a rise in incomes in small towns. There is money waiting to be spent," says Mehta.
Indeed, the size of the retail market in the smaller towns is estimated to be about $123 billion (Rs5,65,800 crore) and is expected to grow to $198 billion (Rs9,10,800 crore) by 2015, according to management consultancy fi rm Technopak. From apparel to footwear to consumer durables, brands across categories want a share of the pie. Videocon has 2,000 stores at the zonal level and is rapidly expanding with its Digiworld, Planet M and mobile formats. Consumer durables maker Samsung has 300 outlets and is planning to double that number next year, with a focus on Tier-III locations. Apparel retailers like Raymond have always had an extensive cross country presence and others are catching up too.
Take SKNL, for instance. The group that retails brands like Reid & Taylor and Belmonte launched World Player, a brand especially targeted at smaller towns, about fi ve months ago. World Player offers formal and casual garments at prices starting from Rs149 to Rs599 and is available in 140 districts across the country, including towns like Bagalkot and Gadag in Karnataka, and Khammam and Cuddapah in Andhra Pradesh.
"It is present in 800 touch points, and we'll open our stores for the brand by the middle of next year," says Ashish Amin, President, Apparel and Retail, SKNL. The retailers also alter their product offerings in tune with locations. "In a metro, the proportion of formal and casual wear would be 70:30. In a small town it would be 50:50," says Mehta. Customers in north India outstrip their southern counterparts when it comes to big-ticket purchases, say retailers. "Customers in small towns prefer all-purpose sportswear, while those in the metros are more specific," says Tushar Goculdas, Director, Marketing and Sales, Adidas India.
The retail expansion drive, though, is not without some constraints. "Access is a problem," adds Goculdas. "The sales teams fi nd it tough to access these stores. Getting the merchandise right, educating the franchisee and training the staff all takes time," he adds. But given the fast-expanding market, these hurdles are only minor irritants before retailers clamber on to the small town bandwagon.
It is customers like Sharma who are driving Van Heusen's growth story in India, especially in towns like Meerut. In a peak month like November, it is estimated to have notched up sales of Rs23 lakh. "The store is slowly inching towards sales of Rs1 lakh a day," beams Shital Mehta, COO, Van Heusen. The brand from Madura Garments diversifi ed its India game plan last year, entering into casuals and denim wear, and aggressively penetrating towns like Meerut, Kota, Sri Ganganagar and Nanded in a bid to drive growth. It is dreaming big now, with plans of reaching the top 100 towns over the next two years. "The market is evolving thanks to farm loans and waivers in rural areas and a rise in incomes in small towns. There is money waiting to be spent," says Mehta.
Indeed, the size of the retail market in the smaller towns is estimated to be about $123 billion (Rs5,65,800 crore) and is expected to grow to $198 billion (Rs9,10,800 crore) by 2015, according to management consultancy fi rm Technopak. From apparel to footwear to consumer durables, brands across categories want a share of the pie. Videocon has 2,000 stores at the zonal level and is rapidly expanding with its Digiworld, Planet M and mobile formats. Consumer durables maker Samsung has 300 outlets and is planning to double that number next year, with a focus on Tier-III locations. Apparel retailers like Raymond have always had an extensive cross country presence and others are catching up too.
Take SKNL, for instance. The group that retails brands like Reid & Taylor and Belmonte launched World Player, a brand especially targeted at smaller towns, about fi ve months ago. World Player offers formal and casual garments at prices starting from Rs149 to Rs599 and is available in 140 districts across the country, including towns like Bagalkot and Gadag in Karnataka, and Khammam and Cuddapah in Andhra Pradesh.
"It is present in 800 touch points, and we'll open our stores for the brand by the middle of next year," says Ashish Amin, President, Apparel and Retail, SKNL. The retailers also alter their product offerings in tune with locations. "In a metro, the proportion of formal and casual wear would be 70:30. In a small town it would be 50:50," says Mehta. Customers in north India outstrip their southern counterparts when it comes to big-ticket purchases, say retailers. "Customers in small towns prefer all-purpose sportswear, while those in the metros are more specific," says Tushar Goculdas, Director, Marketing and Sales, Adidas India.
The retail expansion drive, though, is not without some constraints. "Access is a problem," adds Goculdas. "The sales teams fi nd it tough to access these stores. Getting the merchandise right, educating the franchisee and training the staff all takes time," he adds. But given the fast-expanding market, these hurdles are only minor irritants before retailers clamber on to the small town bandwagon.
