How to Feb, 02 2015

How to embrace online channel for profits

A legendary saying goes like this, “A true Indian noble; embraces what is global.” No wonder international accessories brands have considered India to be a welcoming and profitable destination for expansion. Let us have a glimpse of how these brands a

By Rashi Mathur, TFW Bureau
Feature Writer
How to embrace online channel for profits

The Indian accessory market was worth US$ 3 billion, in 2013. It is expected to grow at a Compound Annual Growth Rate (CAGR) of 12 percent and touch US$ 6 billion by 2019. The accessories market has successfully taken a leap from posh urban cities and penetrated in the interior region also. This has tempted international brands greatly. However complex and stringent regulations in India, rising real estate cost, marketing constraints and recruiting the right talent for successful running of franchise brick and mortar stores prove to be hindrance for them. Consequently, most of the brands are opting for e-commerce as an alternate route for expanding their business empire in India or starting a new business. E-commerce in India was valued at $3 billion in 2014 and is expected to reach to $15 billion in two years.

E-access to accessories

Woodland India, a leading outdoor wear brand with expertise in apparel, footwear and accessories is looking forward to expand its market reach by making its products available on online space. The brand shall launch a new range of products to be sold via e-portals exclusively. Crocs India, another international brand is eyeing expansion via digital marketing and e-commerce. The brand forayed into franchising last year opting for multiple franchise model. Explaining about their strategy, Nissan Joseph, General Manager, Crocs India says, “One big step that we are taking in 2015 is launching our own e-store. Since e-commerce is a very powerful medium to reach out to our target audience, we will continue to build on our select partnership with online aggregators like Jabong, Amazon and Firstcry.com along with our own e-commerce portal. Our aggressive growth plans will also focus on the expansion of Stock Keeping Units (SKUs).” To add to the grandeur, Authentic Brands Group, LLC announced an exclusive agreement with Reliance Brands Limited (Reliance), a part of Reliance Industries Group to bring Juicy Couture, a globally renowned brand to India within this fiscal year. Juicy Couture, a lifestyle and casual luxury brand signed a long term franchise agreement with Reliance Brands to market and distribute the brand in India. Darshan Mehta, President and Chief Executive Officer, Reliance Brands Limited says: “In addition to Juicy Couture brick and mortar locations, Indian fashion lovers will be able to immerse themselves in the Los Angeles heritage and attitude of the brand at JuicyCouture.com, the cultural hub for all that is Juicy.”

Power boosters

Key growth drivers

There has been a heightened demand for both fashion and personal accessories among the spendthrift Indian youth and to start own business. International brands are given preference due to their established global outreach. Moreover India is a young nation with a median age of around 27 years. By 2020, it will emerge as the youngest emerging economy of the world. Accessories are considered a vital part of one’s attire and add to the wearer’s personality. Exposure to worldwide fashion trends, work related travel and multi-cultural environment- add to the inclination among population towards accessory market. Corporatisation of accessories retail and customisation of products have given a go-ahead to supply in this industry. E-retail model offers a wider portfolio of accessories and features more options in terms of brands. Relative ease of purchase is the most luring factor.

Pop-ups and bugs in the course

Internet connectivity speed in India is comparatively slow as compared to other countries, where Wi-Fi and mobile internet access is fast paced. E-commerce portals at times are not able to maintain the congruency with brick and mortar stores. Predatory pricing can dilute a brand’s image. But if these hurdles are somehow done away with, there is no route as easy as e-retail for international franchise brands to establish themselves on a wider landscape.

Lessons to learn

Lately online portals proved to be a turn off for traditional retailers owning to unfair pricing and unreasonable discounting. Harkirat Singh, Managing Director, Woodland India explains as how to curb this practice and maintaining brand stability at the same time. He says: “Woodland products are available across multiple channels including brick and mortar stores, multi-branded retail outlets, multi-branded e-commerce portals as well as its own e-tailing venture. In order to cater to the growing demand across all channels, we have decided to have separate Stock Keeping Units (SKUs) for each of them so that there is no overlapping and one can set their own price points, subject to our mutually agreed costing.” Sharp business acumen will surely help each platform to scale up individually with its own set of offerings in the absence of overlapping. Hence, with internet sales going strong, international brands can very well opt for e-commerce and at the same time broaden the base of their franchise stores.

Related: Turn to Turnkey Franchise

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