When no single retailer is ready to lose reputation and market share by ignoring the quality of products, evaluating the products delivered by vendors becomes necessary and results in the search for parties or organizations which are involved in monitoring quality and safety solutions to customers’ products and processes.
In India, among such organizations, Intertek is a leading provider of quality and safety solutions with expertise over a wide range of industries. With a global network of more than 1,000 laboratories across 110 countries, the company operates four laboratories in India and offers testing and inspection services for textiles, footwear, toys, supply chain services, sustainability services and other consumer products. Recently, it has opened a laboratory and office in Mumbai and will soon diversify its business in other areas, besides planned expansions for special economic zones (SEZs). In an exclusive interview with IndiaRetailing, Dilip Gianchandani, regional director, Intertek Testing Services, speaks about the importance of quality assurance at a time when the whole world is reeling under economic meltdown as people want more value for money they spend. Excerpts:
India Retailing (IR): How would you describe Intertek’s role in the entire chain of retailing business?
Dilip Gianchandani (DG): An idea is pure untapped potential. At Intertek, we enable thousands of retailers to harness this potential and transform their ideas into success. Everyday we support thousands of clients around the world, providing testing, inspection, certification and a range of other third party services. Our services take us into almost every field imaginable, such as textiles, toys, electronics, building, heating, pharmaceuticals, petroleum, food and cargo scanning. But whatever we work, our focus remains the same; to support our clients and provide confidence-inspiring expertise. We are the third party in the business where the first party is the buyer and the second party is the supplier. We follow the protocols as per the company quality manuals and test each and every parameter as per the requirement of the retailer.
IR: What are the services on offer?
DG: Our solutions revolve around the needs of our customers. We work across a diverse range of markets and sectors, understanding the challenges they face and building a service to meet them head on. Our range of services include testing for fitness for purpose, due diligence and benchmarking; inspection during product development, manufacturing and final random post production; factory and supplier auditing and evaluation; research and development projects; training and education; laboratory accreditation; specification writing; consultancy; ethical and code of conduct audits; customer returns analysis; technical advisory services and import security validation.
Our prime focus is on consumer goods. We do provide a complete solution, besides testing and audit functions. We offer services including testing, certification, auditing, safety, inspection, quality assurance, evaluation, analytical, advisory, training, outsourcing, risk management and security services across products ranging from textiles, toys, electronics, building, home appliances, heating, pharmaceuticals, petroleum, food and cargo scanning to name a few.
IR: What is the necessity of a third party for quality check?
DG: Retail practice is moving away from small independent outlets purchasing small quantities from small local producers to large multiples purchasing large volumes globally. Large retailers have developed a strong brand culture in own label and own brand products as well as promoting International and National brands. This situation has produced a number of challenges that have to be met by buyers to provide their customers with the right goods at the right quality and at the right price.
The burden of safety and quality inspection and testing usually rests with the manufacturer while the legal contract with the consumer rests with the retailer. All this necessitates a need for a neutral third party to authenticate and validate manufacturers claim regarding the quality of their produce and also to advice the retailers regarding the most recent developments in the world markets in the areas of safety, regulatory or performance standards.
and regional when any brand in apparels is built on quality, it wants to ensure not only the fabric but also the finished garments are absolutely as per the requirement of the customers. It wants to minimize the returns once goods are sold, which happens mostly in developed countries unlike in India. It wants the consumers to come again and again to buy new products, not to change the product. So to maintain the brand image, it needs to ensure that the products supplied by their vendors are at par with their standards, and thus hiring third party is always advantageous.
IR: How is the market of Intertek in India?
DG: Unlike the customers in western countries who are much more evolved and mature in retail with more than 80 per cent of retail under organized sector, we are still in a nascent stage of this progress with just over 5 per cent organized retail. However, for the last few years, domestic market in India has been evolving in regard to quality, safety and environment issues and also due to the entry of global brands. People are becoming tremendously brand conscious and thus looking at value for money. Thus retailers like Pantaloons and others who are in the business of private labels, are showing interest in quality assurance to ensure that the customers are fully satisfied by the products being offered. And this is what is very lucrative for us.
IR: And a few of your clients are?
DG: In India, we have brands like Future Group and Madura Garments, whereas globally we offer services to brands including Shell, Canon, Marks & Spencer, Oriental Trading Company, Huffy Corporation, and Gap Inc.
IR: How does quality check fit into the scenario during an economic slowdown?
DG: When economy is booming quality is important, but when economy slows down, quality is more important because people want more value for money. Earlier people with disposable income were not so much conscious about the product, but now for everything they spend, they look for more and more quality. In our business, global meltdown does not have much impact. We are doing pretty well and the customers’ response is very impressive.
IR: What is your expansion plan?
DG: We are looking into soft-line here that encompasses consumer goods. We have labs in cities including Gurgaon, Bangalore, Tirupur and Mumbai. Now, we are coming closer to the customers and vendors. We have some proposed plans to invest in different SEZ clusters to provide services at the doorsteps of the vendors. We are also entering into footwear testing segment soon. We are growing in different services and different sectors, but our focus is to consolidate our position and at the same time invest more in the market.
IR: What is the size of the company and its current growth rate?
DG: Intertek India is already a Rs 125 crore plus company. We are growing with double digit growth and this year too is expecting the same.
IR: What will be your focus areas as of now?
DG: We are trying to reach out to the local retailers as much as possible. With an up front strategy, we are looking for growth pockets not necessarily in relation to exports but also within the fast developing retail segment. We want to provide international practices to local retailers who want to grow and attract more consumers to make them come again and again to the same shop.