The brand is betting big on technology to achieve business goals. Sunil Pathare, Vice Chairman & MD, Maxwell Industries Limited, VIP, shares about latest offerings, future growth strategy of his brand– including launch of a premium brand.
What are the biggest challenges being faced by the innerwear industry today?
Sunil Pathare (SP): The innerwear market has been growing at a very fast pace over the last five years. On the other side the manufacturing capacities especially the ones with the latest technologies that deliver good quality products are limited. We see this mismatch in the result that today there are scores of brands which do not have manufacturing capacities but are outsourcing and supplying substandard products depending totally on a flurry of marketing.
What are the biggest challenges faced by VIP and how do you plan to overcome them?
SP: VIP is not in the race to make quick gains by introducing substandard products. We have always believed in giving only the very best of quality and service to both our retailers and end consumers. To consistently do this we have regularly invested in the up gradation of technology.
Our investments in R&D are substantial. We challenge not just the competition but ourselves in the commitment to regularly introducing innovative high quality products.
Can you summarise what VIP stands for?
SP: VIP the term and similarly our brand stands apart as a status symbol. And it is not just a claim. For four decades now we have backed the imagery with good quality, comfort and committed services.
What do you think are the main strengths of your brand?
SP: We have been one of the leaders in the branded innerwear segment for a very long time now. Some of our products dominate the category. The strengths of the brand and what it is renounced for are our innovative products, high quality and supreme comfort. On the business side our scale and well entrenched national presence across all sales channels are our core strengths.
What do you think are the opportunities in the innerwear industry and particularly for VIP?
SP: Innerwear categories are growing and new ones are emerging with changing lifestyles, increasing awareness and newer demographics. Economic well-being and more purchasing power has also seen consumer spending on innerwear growing. We see in this broad evolution a very big opportunity for our brands. We have already successfully introduced lounge wear, thermals and boy’s socks. We are also introducing products in premium segment.
Which consumer categories and types of cities or towns will drive growth of innerwear?
SP: Consumers in SEC B & C have evolved and their requirements are specific. Similarly, the increasing purchasing power of consumers in tier -II and -III cities coupled with growing preference for buying products from reputed brands. Both are clearly making a way for the growth of several new categories.
What are the product segments that are likely to emerge in Innerwear in the near future?
SP: We believe that sportswear, swimwear and intimatewear would emerge strong.
Can you describe the core of your future growth strategy in India?
SP: We will be widening our existing product portfolio and launching many more categories. Parallel to this we will be expanding our market penetration with the help of e-commerce, EBOs and organised retail. We are also already working on the launch of a premium brand and it will be launched in a couple of months.
What are your significant initiatives in the online and omni-channel areas? How important are new channels in your scheme of things?
SP: It’s a very important sales channel for us and you will see significant initiatives from VIP in e-commerce domain. We are already present on a few e-commerce portals. While we are eager to reach more and more customers with the help of e-commerce, our focus will be on offering exclusive products and customer satisfaction and definitely not on discounting the product.
What are the significant technological initiatives – production and retail side, social marketing initiatives, and retail expansions undertaken by your brand in FY 2014-15?
SP: With implementation of Lectra technology for product development and cutting in our business, business goals related to productivity, time-to-market, and the ability to respond to customers’ demands better and faster have been the key areas which we targeted. We were of a firm belief that an integrated technology solution was the way forward to achieve our business goals, specifically in manufacturing and productivity excellence. By implementing Lectra solutions at our factories, our ability to plan and execute orders have seen significant improvement and we can say that we today do it without delays. Lectra’s lean manufacturing technologies helped Maxwell to provide consistency in our product quality, increased productivity, improved efficiencies and improved fabric utilisation. Further, the fashion market, being, a demanding and a changing market, competitive presence is of great importance. By investing in integrated technology solution, we continue to provide value products with consistent quality for our customers and are able to react to customer changes quickly. This gives us an edge over our competition. With improved quality, reduced defects in manufacturing, value addition to our business is immense. Investment in technology like Lectra has enabled us to consolidate all manufacturing to in-house, thereby reducing dependency and uncertainties. This has certainly added value to our whole operations.
On the other side we have seen a movement from our legacy system. Our ERP system was installed around 2004 and has almost lived its utility life. Moreover the orientation was more on the financial side with less support on quantitative inputs and information. The present movement into SAP AFS was considered after evaluating various systems available in the market. The AFS module is a better system when dealing with multiple SKUs which are very normal for textile companies. Apart from this the usual rigidness which SAP brings into operation along with best its operational practices makes it a good fit. Moreover many of the operations in SAP are now standardized which make it simple to implement.
We have also installed an array of imported knitting machines. On the marketing and consumer communications side we have now initiated strong social media presence across Facebook, twitter, YouTube and Pintrest.
Presence wise this last year has seen us being available in all modern retail formats. We have also revamped our EBO model and in coming year the number of our EBOs will also grow exponentially.
What are the significant new collections launched by your brand in FY 2014-15?
SP: In 2014-15 we have added three new major product categories in the VIP product portfolio. We have launched VIP men’s loungewear, handkerchiefs and thermals. Younger down, we have widened our boy’s product portfolio with boy’s thermals and boy’s socks. Loungewear and thermal categories have been designed with focus on the comfort factor and serving the basic needs of consumer and more. Within loungewear we also offer t-shirts, muscle tees, bermudas and track pants. We consistently use 100 percent cotton fabric for better comfort and great breathability. In thermals we have round neck tops and bottoms too.
Brand name: VIP
Launched in: 1971
Parent company: Maxwell Industries Limited
Country of origin: India
Product range retailed: Men’s vest, briefs, trunks, hankies, socks, lounge wear and thermals; and kids’ vests, briefs, trunks and socks
Total number of EBOs: 15
Total number of SIS: 1,200
Total number of MBOs: 30,000
Total space occupied by EBOs and SIS: 41,000 sq.ft.
Annual sales from EBOs and SISs: Rs. 30 crore
Sales ratio (brick-n-mortar versus online): 99:1
Annual turnover: Rs. 130 crore
Number of cities the brand has EBOs and SISs: 80
Number of cities the brand has MBO/ SIS/ EBO presence: 200+
Top selling product categories: Vest, briefs and trunks
Strongest region in India (max. sale): South
Price range of the categories available…
Briefs: Rs. 90 – Rs. 130Trunks: Rs. 90 – Rs. 150Boxers: Rs. 325 – Rs. 375Vests: Rs. 65 – Rs. 120Thermals: Rs. 400 – Rs. 550Lounge Wear: Rs. 275 – Rs. 600