n an elaborate discussion with IMAGES Retail, Vasanth Kumar, Executive Director, Max Fashions talks about their pragmatic step of associating with Flipkart.com and how and why omni-channel retailing will become market reality for the retail sector.
Tell us about the growth rate of Max Fashions retail over the last few years. What are the factors that have facilitated this growth?
Max India is supported by Max Dubai in terms of design inputs as well as retail identity. However, the sourcing and merchandising is predominantly done through Max India’s domestic team for delivering appropriate range with sharp prices. Also Max being a 100 per cent private label with own retail offering international fashion at interesting price points and with superior store experience, the brand differentiates itself from its competitors, facilitating high growth rate. Max Fashions in India is growing at a healthy rate of 40 per cent Compound Annual Growth Rate (CAGR).
In the overall profit pie of Landmark Group, what is the share of Max?
Max is indeed a profitable format for the Landmark Group. In India it is part of Lifestyle International, which too is profitable. Separate figures are not available to share.
How many Max stores are there in all and what markets do you plan to expand and invest in the near future?
Max has 110 stores across 45 cities and it is opening one new store every 12 days. Typically, a new Max store is spread around 12,000 sq.ft. area, with investment of Rs. 4–5 crore (for both stock as well as fit-outs) funded primarily out of internal accruals.
If we compare the Indian market with that of the UAE, what are the merits and demerits?
The Indian market comprises of over 90 per cent fixed customers wherein repeat customers are key, whereas in UAE the floating customer’s share is equally strong due to tourism component.
What is the quintessential requirement in a brand not only to exist, but to stand out in the apparel industry?
The essential requirements for a brand to succeed in the value fashion segment are
clear positioning through products or value differentiation; superior brand experience across customer touch-points, both within as well as outside the store; and high levels of operating efficiency delivered through a motivated team.
How has the Indian apparel market been like for the last two years?
Organised retail is growing well at over 20 per cent CAGR. This growth is owing to mall expansion as well as aggressive expansion plans by Indian and international retail players.
Brief us on some of the major issues being faced by the Indian apparel retailing industry.
The biggest issue is the lack of quality mall spaces and inadequate infrastructure, including power and road connectivity.
What are the strengths of the Indian manufacturing sector? Your take on the ‘Make in India’ campaign launched by Prime Minister Narendra Modi.
‘Make in India’ campaign gives an excellent opportunity for Indian manufacturers to achieve high growth, through large-scale manufacturing, leveraging, manpower and technology, which are relatively easier to access.
Please tell us about your collaboration with Flipkart.
Flipkart provides us a good platform to connect with millennial customers as well as other internet users to browse and buy goods and services across categories.
Despite the growing craze for online shopping in India, not many e-commerce companies are profit making. What do you suppose is the reason?
Currently, the e-commerce companies are in ‘investment mode’ to increase top line, penetration and stickiness of online customers. The next phase will see consolidation and profitability as key criteria.
According to you, what are the factors propelling apparel players to take the online route? Please tell us about some of the trends you have been witnessing in the e-tailing industry here.
Online is fast emerging as a critical channel for both browsing as well as shopping by Internet users. This also enables web rooming (research online, shop offline) as well as show rooming (research offline, shop online). Essentially, this gives customers the flexibility and choice of shopping opportunities to suit their convenience. All these trends help in category penetration and increased consumption.
According to you, is omni-channel retailing just a passing fad or a market reality?
Omni-channel retailing is an effective route to enhance customer experience and brand loyalty to the respective omni-channel players. It also helps in integrating offline and online into a seamless brand experience. Hence, it is bound to become a market reality.
Do you think the ‘Make in India’ campaign holds something attractive for the e-tailing sector in India?
Surely ‘Make in India’ campaign will benefit e-tailing, since it opens up opportunities for small and medium size vendors to directly participate in e-commerce, thereby increasing overall consumption in the Indian market.