THE accessories market is inching towards becoming one of the best performing sectors in the Indian industry. Witnessing a recent boom, hordes of international players are foraying into the segment to tap the untapped market and take home record margins.
THE accessories market is inching towards becoming one of the best performing sectors in the Indian industry. Witnessing a recent boom, hordes of international players are foraying into the segment to tap the untapped market and take home record margins. The organised industry encompasses handbags, travel gear, wrist watches, footwear, jewellery, etc.
The market is witnessing a paradigm shift. The untapped potential of the sector and huge middle class are key factors for global giants wanting to enter the Indian markets. Even though there are a handful of organised domestic players trying to cater to the demands of fashion-conscious consumers, the country is in urgent need of foreign players who can satiate their demands with their international labels. Most of the domestic and international apparel brands with meager share in accessories are also revamping their product strategies, either by increasing their accessories centres or by extending it into an exclusive segment. As per a recent report, the organised handbags and luggage industry have a share of 40 per cent. The luggage market is pegged at Rs 10 billion whereas fashion bags' market is at Rs 800 crore. In footwear market, the organised segment stands out at US $2 billion, accounting for about 48.4 per cent of the market. Mohan Murjani, Chairman, Murjani Group, says, “Accessories are an extension of the brand, which is positioned in the premium lifestyle segment. Currently in India, the high quality choices available in the lifestyle accessory segment are very limited. THA (Tommy Hilfiger Accessories) offers international design options and the perfect entry point for new customers into the brand, given their attractive price points. Also, there is a growing demand in smaller towns, which again face a crunch of good retail stores. In order to overcome this constraint, we are opening exclusive Tommy Hilfiger accessory stores to unlock the true brand potential. In addition, right priced high design accessories are often linked with impulse purchase and it's our endeavour to have these available at multiple locations pan India.”
As a franchise concept, the fashion accessories market is in a nascent stage. Most international brands don't find it cumbersome to replicate it in India, looking at the opportunity offered. As per N.P. Singh, Director (Retail projects), Samsonite South Asia Private Limited, “As per Indian demographics and other business models available, franchising is a feasible option to expand. Samsonite is growing annually at 35 per cent and is further expecting a robust growth.” Franchising is also preferred over the other business models as it is easier for a franchisee to run an already established business. Darpan Kapoor, Master Franchisee, United Colors of Benetton, (Punjab, Haryana, Himachal Pradesh, J & K & Chandigarh), says, “We receive thorough training and support from the company. From store set-up to visual merchandising guidelines to product and training, the company provides regular inputs to the staff.”
The mounting sales are making international brands expand rapidly. Samsonite is planning to expand in tier II and tier III towns instead of metros because of the roving rentals and availability of apt location. THA is also on an expansion spree, as Murjani says, “We are planning to open around 500 accessory stores, including stores, kiosks in atriums of malls, airports, etc in all major cities and mini-metros, in addition to tier I and II cities.”
Most of the brands face tough times at the time of arrival. According to Singh, “We had to face tough competition in the beginning from existing brands, especially, domestic players, as they had their monopoly. To build our brand identity and as per consumer demands, we customised our price and products.”
Every brand has its own clauses. A few brands give its franchisee a chance to sell its franchise further but a few brands are rigid and give franchisee a tough time.