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…!)