ZARA into India – Part 2

I think a few pointers were missed in the earlier article regarding Zara, which I'm including here. I still am of the belief that Zara won't be the type that it is in the European region as far as India is concerned. So in short, I'm still not convinced about Zara being able to make a mark like it did at other places.

The reason why I felt that Zara just might not work is not only because of the population not being fashion centric. But in places like Europe, Zara is positioned as a mainstream brand. Something like our Killer Jeans and Spykar Jeans and the likes. Now in their lines, Zara will have to make its way through.

Also, because of its peculiar characteristics of keeping low amount of every SKU, there are no chances that Zara might ever come up with a discount scheme or an end season sale. So that's also a put off for an Indian. Zara's design team as well as the manufacturing facility is somewhere in Spain. Now we all know that the cost of manufacturing in the textile industry is the lowest in India and China. Given this situation Zara yet prefers to stick to Spain as its manufacturing hub. True, the plant is highly capital intensive requiring lesser amounts of labour than most conventional plants do. Yet, the very fact that the plant is in Spain means that the clothes won't be as economical as we have in India.

I agree that Zara could be a niche player, but then there too its entire business model stands of no use. I mean what's the use of changing your inventories every fortnight if the stocks aren't moving? What do you do with your old stock?

My only point here is Zara's business model can't be deployed on an 'as is' basis. And if it doesn't, I don't think there's much to gain in the Indian context, at least as of now.! The topic is laid to rest. (Commenters! Fire at will…!)

Update on me selling gas…!

Well, its been few days since I've been obsessed with selling gas to the whole nation. And there are a few good surprises and a few bad surprises in the way.

Good ones first. Firstly, I don't see any car or tyre or two wheeler manufacturer talking about nitrogen in tyres and stuff like that. (I'm quite surprised though. I always had a lot of reverence towards the automotive industry) anyways, so that's one. Two, there are machines in place which can convert the normal atmosphere air into nitrogen with 95% purity, which effectively is 93% in trucks and heavy vehicles. Smaller vehicles may have better purity levels of nitrogen. So yes there are I believe better and cost effective ways to get nitrogen to the masses. Oh and by the way, from now on I shall refer to it (it as in nitrogen) as performance air. Sounds better. And besides, that's what it is for the normal dude who owns a Hero Honda Splendor.!

Coming to the bad things. Well first of all Ceat Tires is planning to install these performance air outlets as a part of its brand revamp strategy! And they've paid a whopping INR 20 crores to O&M to figure out how to go about it. So technically I'm putting up a fight against Ceat and O&M…! Sheesh! (Must…not…pee…in my pants…!). But a more pertinent question is why the hell are they setting up nitrogen stations at tyre outlets? From the India I know of, people fill up air at petrol pumps, not some swanky tyre shop! But that's their take and their 20 crores so why should I care?

This is the problem with all MNC type companies. They're so indulged in serving high value customers that they completely forget the 'real' high value customer, and that's the truck drivers. I mean Indian road terrain is so hopeless, that anything that will elongate tyre life, increase mileage and less hassles regarding air pressures is welcome. I've commuted via buses for nearly a quarter of my life and there have been umpteen times when there are issues with bus tyres. There's a lot to be expected that remains unfulfilled. Performance air can change that.! J

And as for machinery, well yes there's this company called Parker Hannifin something something, which produces nitrogen compressors. These babies produce 95% pure nitrogen like I said earlier, and are stand alone units like normal air compressors. Just formulating a proper strategy to contact those dudes.

And yes, I showed a dummy presentation to the class on Performance Air in a Strategic Brand Management class, using a fake brand called Air2. The people liked the concept until they found out that what I showed was a hoax. But it was fun doing a small trial run on the response of people. And I also fancy the brand name Air2. I like it for a Performance Air brand. What do you say?

More in the next run.

If we have performance tires, performance breaks, performance fuel, why not Performance Air?

I’m going to talk about Performance Air. For people who don’t believe in ideas, buzz off, and for people who do, you are free only to appreciate my ideas and if you choose not to, the same rule about people not believing in my ideas applies to you as well.

Talking about Performance Air, there are many vectors based on which you can perceive the whole thing. But before that let me give you a little bit of background.

Normally the air that we pump in a tire (be it 2 wheeler or 4 wheeler) is called compressed air. Composition-wise the compressed air is made up of nitrogen (78%), oxygen (21%) and other related gases (1%). The figures may vary a little bit, but the point here is that this is the ratio of the gases we have in our tires. Also, in worst case scenarios you also get moisture as a part of the composition which worsens the tire wear and induces rust (that is if you are not running on alloy wheels).

Now get a load of this. Had we filled the tires with pure nitrogen (that’s 100% nitrogen filled tires) instead of the usual compressed air, you would have no moisture (which means your frames don’t rust) and slower air gas diffusion (since nitrogen is heavier than oxygen, it won’t diffuse out of the porous tire walls that easily). Plus, nitrogen is lighter than air, so you save on weight and increased performance. Nitrogen is not a catalyst to combustion, while oxygen (which is present in compressed air) is a catalyst to combustion. So if your car’s on fire, make sure your tires aren’t leaking, unless you want the car to go up in flames! Also, filling up your tires with nitrogen will ensure better and uniform tire wear, and better performance.

I just talked about 5 advantages of nitrogen filled tires as compared to the normal compressed air. The only drawback perhaps is the fact that I might have to pay 10 Dhs or INR 10 to get my tires filled with nitrogen.

Now lets look at this from various vectors. If you are a high value customer who owns a sports car with Pirelli tires or something like that, quite naturally Performance Air makes quite a lot of sense. I mean you spend a ball buying a Porsche lets say, you squeeze your credit cards to the limits to get Pirelli tires and set of Brembo break systems and the likes. Finally what do you fill your tires with? Compressed air. That’s what the whole world uses. Its kinda low class ain’t it? For a performance vehicle, you definitely need Performance Air.

Now let’s take another vector. A normal dude with a Bajaj Discover or a Hero Honda Splendor might not have many performance tweak options available to him. One, because the engineering limitations doesn’t permit him to do so. Two, there is no 'do-it-yourself' kind of stuff available for the rider to tweak. But with the same given set of equipment he surely can have Performance Air in his bike. Dandy ain't it?

Another vector for the Performance Air can be women. Since women are regarded to be lithe and nimble, the sight of a woman dragging a flat two wheeler seems quite pitiful. Mind you, I’m not a male chauvinist, but let’s not get into all that.

The point is two areas where women and vehicles are at a cross is when there’s a flat tire, or when it comes to vehicle handling, especially in the case of two-wheelers. Both are areas which Performance Air can address.

Flat tire probabilities can be reduced since Performance Air has lesser gas diffusion since it has larger molecules than air, plus, handling is improved since tire print on the road is better.

There might be other vectors yet unexplored like children and the safety aspects or something like it. The point is, I’m trying to sell air, at a premium and yet make consumers believe that it’s worth every penny you are paying for. How do I do that, or whether this blog remains only on paper is still a question mark.

(note: it’s been just 2 days since this idea has been haunting my mind, and given a chance I’d put all my money into this idea; for sure. There are very few brainwaves that really make sense to me. Rural stuff is one, this is another. If any venture capitalist is reading this blog, do drop me a line. I’m game. Just one condition. Please let me complete my MBA! Or else my dad will kill me.! :-)

Zara's Entry to India.. What say u..?

In fact I wish to do quite a bit of research into this one. But however, this thought has been boiling in my belly since quite some time, so I’m putting it on the blog. Now for those who don’t know what Zara is; well as a primer, you can say that ZARA is one of the very prominent fashion brands especially in the European countries.

And since the era of retail dawns upon India, many brands have started shifting their faces towards the Indian sub-continent. Zara I believe must be one of them. I don’t have many news clippings to prove that they are seriously looking about foraying into India, but I’m sure they’re looking at the options.

Now allow me to tell what’s so special about Zara??? Typically, any firm that’s into fashion apparels follows a 12 month planning period. That means in any normal nicely running mill, Arvind Mills let’s say, starts its design phase for any particular season 12 months in advance. Thus, we can safely assume that the designers at Arvind Mills have begun the designing apparels for the summer of 2008. Cool no?

Well, for any layman this would sound like really hunky dory, but in real fashion terms, this 12 month-in-advance cycle actually sucks! And the reason is quite simple. Fashion is an ever changing phenomenon. And typically any fashion house can be called successful if it is able to respond quickly to the customers’ changing preferences with respect to fashion! And after knowing the kind of design cycle Arvind Mills follows, you certainly can’t call them as a responsive fashion house. In fact any fashion house of India can’t be called ‘responsive’ to consumer fashion preferences, since most of them follow the cycle that Arvind Mill does.

Thus, we can say that in India, it’s the fashion house that defines fashion for the people rather than the people determining what fashion should be! Quite eerie isn’t it? However, surprisingly, we don’t seem to realize the fact. And we quite easily accept what the fashion houses churn out for us.

This is where Zara comes in. Zara’s responsiveness towards the current fashion trends is as fast as 14 days max! That is, it senses the new fashion trends and is able to deliver designs pertaining to the upcoming fashion and hits the stores within 14 days! From fiber to fashion within 14 days! I think this is what we call as responsiveness.

How does this happen is sort of a complicated thing. It ranges from phone calls from every retailer to the head-office to online tracking of sales and stuff like that to a superb supply chain system. I won’t bore you on all this stuff, but my point is will this brand work if bought to India?

Let’s look at a few statistics to lure you into believing that it will work in India! Zara typically produces around 12,000 designs throughout the year, it produces designs in smaller quantities but produces a variety of designs. Which means lower quantity per design thus no off-season discounts or clearance sales necessary, and variety means more choices for the customer.

It is said that if you go to a Zara outlet and you like an apparel, the store attendant would prompt you to pick it up at that time only, since there are high chances that it would be sold out when you return back in a few days if you plan to pick it up later!

Also, there are around 200 designers who design the garments from fashion inputs received though phone calls from hundreds of Zara outlets every day. Ideally, there is an addition of 1-2 styles every week on a Zara portfolio.

After telling you all this, quite obviously you will tend to believe that Zara should certainly come to India isn’t it?

I say it shouldn’t. Here’s why.

One, there isn’t a sizable amount of population of India that changes its wardrobe every season. Most people don’t even really care about fashion specifics. In fact, there is a large part of the population that waits for the end season sale or the clearance sale to get their hands on the favorite brands. Fashion takes a back seat.
Thus, in this demographic build-up where people are not oh-so fashion crazy to change their pants every 3 weeks, the responsiveness, the 200 designers sitting in Spain and the supply chain counts for nothing at all.

You’re trying to give something to the consumer, and that too to a level he hasn’t matured.

Is it wise? I don’t think so.

What say??

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Jamboree.!

One hundred and thirty five days, twenty hours, and fifty two minutes: The amount of time I spend in this fantasy land.

This jamboree that’s filled with white draped men, names that invariably begin with ‘Al’, malls built literally out of granite, air-conditioned environments, coffee made with condensed milk, roti that could be a very good substitute to a table mat, a place where luxury is cheap and service is costly, a place which people believe sells gold at dirt cheap prices (which in fact is not at all the case), where Mercedes and BMWs roam like the Maruti 800s do in India, where there are more expatriates than the nationals, where people ride SUVs with their legs propped up as if they are riding camels, where the rates for a 5 star hotel suite on a Valentine’s Day night starts from INR 6,00,000, where vegetarians find it particularly difficult to survive, a place which truly is a Mecca of retail, though surprisingly it still remains unorganized in many ways, a place about which you can have no statistical data available whatsoever, a place which is in the process of constructing the world’s longest tower and haven’t declared its actual height for the fear that someone else might build a tower longer than theirs, a place which is truly an oasis made out of sand, the jamboree that’s called Dubai.

Phew.! That was nice.! Maybe I’ll get a few more the next time.