9 days. That’s all it takes, to make you realize how much void you have in your life. People in India die to run away from dirty pot holes, screaming horns, cow dung on the roads and things like that. But believe me, 6 months after staying abroad, all of that is music to my ears.
Maybe we’re born messy, I don’t know, but I like the hustle and bustle. Sterilized environments sort of make you numb, and in many a ways incapable. Here all you have is control - temperature control, climate control, driving control, attire control, attitude control, control over what you say, and eventually control over what you think.
People call it being civilized, but honestly is there any civility in hiding your curse under your nose? Is there any civility in being so politically correct in whatever that you say and do? True, a developed nation teaches you discipline, and a lot of it. Be it discipline when driving cars, while standing in a queue… whatever; but at one point, that discipline aggravates into control and that’s not good.
Yes, in terms of process flow, developed nations are better and easier. It’s easier to buy property for instance in a developed nation. For a country like India, there are innumerable processes, and each take their own sweet time. But what’s necessary to understand is that our minds have been attuned to this ‘process-less’ system, since birth. We have been living in a world where even getting a cooking gas connection is a challenge. And that’s the very reason why we can strive in any given circumstances.
It was during my trip back that I realized how insanely complex it is to manage a democracy like India. In a place like Dubai, which is maybe twice the size of Ahmedabad city, it’s so easy to drive growth. Had Mr. Narendra Modi been asked to handle a state only twice the size of Ahmedabad city, he would have done wonders, and that too with relative ease. But sadly that’s not the case. He has to handle a state with about 20,000 cities and villages.
In a place like Dubai, a lot of micro-management is possible. The citizen is accessible. There is more money, and fewer responsibilities to put money into. The case is inverse in a country like India. And yet we strive. And yet we post 8-9% growth for a considerable period.
People say that 95% of retailing in India is unorganized. And for all I feel, there’s a fair chance that it will remain so, especially in a rural setting for a pretty long time. A lot of industries in India still remain unorganized. Industrialists, and economists feel that its not appropriate. What most people don’t realize, is that its these unorganized supply chains that have oiled the economy of India since independence.
It’s the roadside vendor, the small kirana shop outside your house, the ‘kaam-wali bai’ who comes to do the household chores everyday, the milkman… it is these people that oil the economy. Their contribution might be miniscule, but together, they give a lot to drive growth.
And this is what fascinates me about India. It is the minuteness of entities from where the enormity comes out. Challenges in large conglomerates are crap. There are really few challenges, but a lot of brains thinking who can solve the problem. But there’s no one to help in the Small Scale industries sector. There are the real challenges. SSI’s face problems day in and day out, simply because there are a lot of SSI’s and not enough trained manpower to run them.
And lastly, I’ve realized, that India is a Knowledge economy, while Dubai is very much still a trader economy. As a trader economy it might have huge financial resources, but not a lot of brains. As a knowledge economy, we have a lot of brains, but not enough resources to tap them.
In conclusion, all I would say is that it is after staying abroad that I’ve truly realized the potential of the Indian economy.
When MNCs started deciding to come to India for setting up business, I thought, “hey! They should have come a lot earlier”… but after staying away, I really don’t blame them. As a nation our PR skills are downright pathetic, and maybe that’s the reason why no one ever paid heed to us. It was the sound of money that made them overlook whatever image they had formed about India and came running to us.
If democracy were a norm of this world, we could have been a world power long back.
Showing posts with label retail. Show all posts
Showing posts with label retail. Show all posts
Zara enters/should enter/should not enter India - Part 3
There are alredy 2 blogs written on this topic earlier. Assuming you’ve read them already, I’ll not waste time on the technicalities of the Zara model, and get to the point.
Should Zara (really) enter India or not? If you look at it in that sense, perhaps every other international brand should enter India. And why not? A sizable part of the population of India is under 30 years of age; disposable incomes are rising, so are aspirations, living standards, customer awareness, and all the economic lingo stuff.
But that’s not the point. Just because things are getting better in an economy doesn’t mean that we have graduated to any other brand/product in the world. As a primer to this statement, lets take the example of a microwave. I think about 7-8 years ago, microwaves were first introduced in India. I really don’t know when, but what I do know is that consumer acceptance of that product wasn’t exactly high. For any American, a microwave is a necessity. Probably an American can live without a stove for a while, but not a microwave. That clearly didn’t happen in India. Heating cold food and feeding it to the children was like a disgrace on a mother’s part.
Today, after such a long time, things are changing aren’t they? And mind you, they’re still in the changing mode. Microwaves still haven’t received absolute acceptance even after giving the consumer so much amount of time to graduate to one.
Same goes for Zara. We as Indians used to wear only traditional dhotis and salwaar-kamiz 80 odd years ago. The transition to the western clothing apparently began during the British rule. So firstly in absolute numbers we’re about 300 years behind the Europeans as far as fashion for western clothing goes.
Think about it; even today, if you wear your dad’s shirt and go out, no one would be able to point out that this is an ‘old cut’. The cuts, the stitching techniques have remained the same since a really really long time.
Think about women’s formals for instance. There’s an extremely short range of women formal shirts available in India. And mind you, I’m talking about the design and cuts, not the color of the shirt.
To put it in simple mathematical sense, this is how the 2 ideologies differ:
For Indian Fashion Industry its –
few cuts x lots of color variations
For the Zara Model its –
many cuts x very few color variations
And even if we take colors as a basis, even that sadly isn’t our strongpoint. We were shades of red in summer and wear shades of yellow during winter.
We wear linen in winter sometimes and synthetic materials in summers as well.
There’s no synchrony in us as far as colors, shades, cuts, fabrics go. We wear whatever we feel looks good on us. Every season, has its own shade, color swatch, designs, cuts etc. etc. We’re never so detailed as far as these attributed go. And the Europeans are extremely fetish about these minor details; the same way we’re fetish about cricket maybe.
Also, India follows a 2 season process; Summer/spring collection & winter/monsoon collection. While in Europe there are 4 different collections released for all the 4 different seasons.
Also, I don’t know how many of the readers have seen a Zara store, but Zara doesn’t play with colors a lot. It plays with cuts. And to save on its supply chain costs, you wont find colors other than white, black, grey, cream, red and a few more. Their color swatch is extremely limited, and their design swatch is much higher than an average Indian apparel outlet. You really think Indians will gladly buy only base colors and wear them, when they have so many other vibrant colors being offered by other apparel retailers?
Mango, one of the leading fashion wear brand for urban women has a few stores in India. The collection that it keeps on the Indian stores is one season old already in the International markets.
After reading all this some might see this as a drawback in us Indians, that we’re not so sensitive towards colors and cuts etc; that we haven’t graduated to these details like others have. But honestly are we supposed to graduate? Were shirts and trousers a part of our cultural heritage? We have our own saaris and salwar kameez. That’s where our forte lies. And that’s precisely the reason why Zara originated in Spain and not some shady town in India.
Zara has not been quite a success in the US, and for the simple reason that an average USUS, not in Europe. citizen wants clothing that is completely relaxed, functional and rugged. That’s why jeans were invented in the
Europe has its own fashion, US has its denim jeans, India has its bandhani.
Its seriously wrong for any of us to expect to graduate to the fashion sense that Europeans have. Simply because their definition of fashion is different than ours.
In Gujarati, there’s a saying, ‘gaam khase ke gaadu?’ (should the village move or the bullock cart?)
P.S. Thanks a lot to Sharimbal Kanishk (ex-Globus merchandiser & a NIFT grad) for all the info on Indian Fashion Industry.
Should Zara (really) enter India or not? If you look at it in that sense, perhaps every other international brand should enter India. And why not? A sizable part of the population of India is under 30 years of age; disposable incomes are rising, so are aspirations, living standards, customer awareness, and all the economic lingo stuff.
But that’s not the point. Just because things are getting better in an economy doesn’t mean that we have graduated to any other brand/product in the world. As a primer to this statement, lets take the example of a microwave. I think about 7-8 years ago, microwaves were first introduced in India. I really don’t know when, but what I do know is that consumer acceptance of that product wasn’t exactly high. For any American, a microwave is a necessity. Probably an American can live without a stove for a while, but not a microwave. That clearly didn’t happen in India. Heating cold food and feeding it to the children was like a disgrace on a mother’s part.
Today, after such a long time, things are changing aren’t they? And mind you, they’re still in the changing mode. Microwaves still haven’t received absolute acceptance even after giving the consumer so much amount of time to graduate to one.
Same goes for Zara. We as Indians used to wear only traditional dhotis and salwaar-kamiz 80 odd years ago. The transition to the western clothing apparently began during the British rule. So firstly in absolute numbers we’re about 300 years behind the Europeans as far as fashion for western clothing goes.
Think about it; even today, if you wear your dad’s shirt and go out, no one would be able to point out that this is an ‘old cut’. The cuts, the stitching techniques have remained the same since a really really long time.
Think about women’s formals for instance. There’s an extremely short range of women formal shirts available in India. And mind you, I’m talking about the design and cuts, not the color of the shirt.
To put it in simple mathematical sense, this is how the 2 ideologies differ:
For Indian Fashion Industry its –
few cuts x lots of color variations
For the Zara Model its –
many cuts x very few color variations
And even if we take colors as a basis, even that sadly isn’t our strongpoint. We were shades of red in summer and wear shades of yellow during winter.
We wear linen in winter sometimes and synthetic materials in summers as well.
There’s no synchrony in us as far as colors, shades, cuts, fabrics go. We wear whatever we feel looks good on us. Every season, has its own shade, color swatch, designs, cuts etc. etc. We’re never so detailed as far as these attributed go. And the Europeans are extremely fetish about these minor details; the same way we’re fetish about cricket maybe.
Also, India follows a 2 season process; Summer/spring collection & winter/monsoon collection. While in Europe there are 4 different collections released for all the 4 different seasons.
Also, I don’t know how many of the readers have seen a Zara store, but Zara doesn’t play with colors a lot. It plays with cuts. And to save on its supply chain costs, you wont find colors other than white, black, grey, cream, red and a few more. Their color swatch is extremely limited, and their design swatch is much higher than an average Indian apparel outlet. You really think Indians will gladly buy only base colors and wear them, when they have so many other vibrant colors being offered by other apparel retailers?
Mango, one of the leading fashion wear brand for urban women has a few stores in India. The collection that it keeps on the Indian stores is one season old already in the International markets.
After reading all this some might see this as a drawback in us Indians, that we’re not so sensitive towards colors and cuts etc; that we haven’t graduated to these details like others have. But honestly are we supposed to graduate? Were shirts and trousers a part of our cultural heritage? We have our own saaris and salwar kameez. That’s where our forte lies. And that’s precisely the reason why Zara originated in Spain and not some shady town in India.
Zara has not been quite a success in the US, and for the simple reason that an average USUS, not in Europe. citizen wants clothing that is completely relaxed, functional and rugged. That’s why jeans were invented in the
Europe has its own fashion, US has its denim jeans, India has its bandhani.
Its seriously wrong for any of us to expect to graduate to the fashion sense that Europeans have. Simply because their definition of fashion is different than ours.
In Gujarati, there’s a saying, ‘gaam khase ke gaadu?’ (should the village move or the bullock cart?)
P.S. Thanks a lot to Sharimbal Kanishk (ex-Globus merchandiser & a NIFT grad) for all the info on Indian Fashion Industry.
Of potatoes and air conditioners
Everybody, or lets say almost everybody is loving the retail boom in
And quite obviously one of the major attractions of the retail boom is the cost effectiveness being passed on to the customer. This holds true especially for daily household items and perishable goods like vegetables and regular grocery.
When it comes to the case of vegetables, Reliance Fresh is quite popular. And the fact that Reliance Fresh is more popular as compared to the other mandi fellows isn’t surprising. With air-conditioned environments and the likes it does become a favored place for people to shop for vegetables than the mandi with all its flies and cow-dung infested market space.
But someone tell me, is the core business proposition of Reliance Fresh – to sell fruits and vegetables (which however has been altered in recent times thanks to some unfortunate circumstances) a really profitable and more importantly a sustainable one? The basic problem with the service delivery is not the product, but the costs attached to it, and unlike in developed countries where these costs do not form a larger part of the expense-pie, it sadly does as far as
I mean, lets take an example of a Reliance Fresh store in Ahmedabad. An average Reliance store would have around 8 split air conditioners with 1.5 ton capacity. The commercial electricity rate for Ahmedabad is 4.85 rupees per unit. And assuming a typical reliance outlet operates for 12 hours a day, the total energy consumption of just 8 air-conditioners for 12 hours a day for a month comes to 3240 units = Rs.15,714 just for the air conditioning alone. The racks with cold storage which keeps the vegetables cool consumes almost twice or thrice as much as the power consumed by the A/Cs to keep the vegetables fresh, and thus twice or thrice as much increase in expenses. And we’ve still not taken the illumination and labour charges into account and not even the rent for the place which, by itself would also be equally high.
Now, spending almost a half a lakh on just illumination and cooling, plus an equitable sum on the rent for the place is quite a lot for just selling vegetables of which the largest selling commodities are tomatoes and potatoes which virtually have negligible margins. I do understand that there are some exotic SKUs like broccoli and things like that which give higher margins, but clearly it’s the potatoes and the tomatoes and other similar vegetables for which the customer comes to Reliance Fresh in the first place.
Lower margins and freaky expenses… it just doesn’t add up at least to me! And I still haven’t taken into account a lot of things… the supply chain expenses, the management fees, the cold storage expenses and most importantly the markdowns that happen everyday since vegetables are a perishable commodity.
I just don’t see where the money is coming… its just going out! If Reliance really wants to be in the market of vegetables for long, the current system at least doesn’t approve of it… can’t say about the future.
Your take…
The tendency to believe
Sometimes, I feel we are really stupid people. Our heritage and culture system has taught a lot about respecting the elders, and giving due reverence. But as the days progress in this myriad of classes and field visits and case studies and all that's so very MBAish, there comes a realisation that most of the people who have succeeded are the ones who challenge the norm. We as duds accept what the elders have to say. The very thought of questioning what they say has never occurred to us. Perhaps that's why we never questioned the source of the data on the internet; perhaps that's why we never questioned what the eldest CEO sucker of any company suggested to do in a case study. Maybe that's why we even blindly listen to the professors as to what they say, without having an opinion of our own. And maybe, just maybe that's also the reason why we are so very confident of what the MNC's and other big companies are doing to our country. Maybe even more confident than the MNC's themselves!
There was this realisation that dawned upon me while shopping in Carrefour (the world's second largest chain of retail outlets after Wal-Mart), that while I was back home, every morning there used to be 2 bags of milk laid at my doorstep, freeing me from the trouble of buying milk; that at precisely 9 a.m. everyday a hawker selling vegetables used to pass through my house with fresh vegetables; that the local Kirana guy used to stock a few pieces of that special brand just because I used to buy from him; that the laundry guy used to come every alternate day on his skinny Kinetic Luna with BIG bundles of ironed clothes, and charging only Rs.1.5 per garment including the cost of the home delivery… and all of them, used to do this same mundane task, everyday with sustained delivery standards throughout the year. 24/7, 365 days a year.
And the lives of all these people are getting challenged because the MNCs suddenly realise that organised retail adds up to only 3% of the whole retail pie chart. And thus, they start setting up back end services, start having talks with Indian companies and everyone is all gaga over the influx of hypermarkets and all that stuff. The 'stuff' that's eventually going to get me a job once I get out of this value addition phase! And what upsets me even more is the fact that I'm going to be one of the catalysts in the process of the demise of these minions; these everyday people who have delivered value with such precision, on a regular basis for a long…long time. So much so that it has become like a well-oiled system, the absence of which puts you off entirely. Just recollect a day when the doodhwala didn't arrive, or the laundry guy didn't come making you to wear the previous day's shirt again or something. It puts you off to such a great extent.
And on the other side, when MNCs put up hypermarkets you go to those glittering places in your car along with the family for shopping! Earlier, the doodhwala used to come to your doorstep to deliver milk at HIS cost. And now, YOU are going to the doodhwala (hypermarkets for those who didn't get the metaphor) at his doorstep to buy milk at YOUR cost (obviously you must have used your car for the transport to the hyper mart you idiot!)
Now tell me who's a dud? The doodhwala, or you??
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…!)
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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