Numerous studies and surveys have proven that value consciousness drives shopping habits of Indian consumers. While FMCG firms have been able to give Indians value for money when they shop, Max India is the one firm which has been able to replicate the value-conscious model in fashion retail.
A division of Lifestyle International (P) Ltd., Max India not just pioneered the concept of ‘value fashion’ but has managed to retain this USP over its remarkable 12-year journey in the country. So much so that the brand has been growing at a rate of 38 per cent per annum.
The Director of the Landmark Group, Hariharan Ramanathan, conceptualized MAX and first store opened in 2004 in Dubai. The brand forayed into India in 2005, with a store in Indore. Vasanth Kumar was anointed Executive Director at Lifestyle International – Max Retail Division and handed over the India reins. He was given a simple goal: democratize fashion in India, make looking and feeling good integral for the customer and his experience in the store.
“When we launched Max in 2004 in Dubai, we could see that it was hitting this sweet spot of urban middle class catchment who are globally aware/connected but with a certain value consciousness that drives their shopping habits. They wanted certain price points and they wanted it in a certain manner where they could shop easily for their entire family. Internationally, ours is a proven model. There is Primark in the UK and Target in the US, both running on the same format as us, where value fashion has succeeded very well. The only different thing that we did in Max was that we added a little bit of presentation. We stuck to the format where the store was meant for the middle and upper middle class. This took off very well in Dubai. Within a year we decided to launch the brand in India,” Kumar says.
The team in India was appointed in 2005. The pricing model involved an in-house design team, large purchasing volumes, efficient logistics and cost efficient retailing system in the organization which helps the brand to adapt to changing consumer needs.
“I was the first employee to be recruited and then I started recruiting my team. In 2005, we undertook ground work to understand the shopping habits of the consumers. We visited families in India, we found out about their wardrobe habits. Dresses, back then, were considered extremely fashionable. We realized that the menswear category was dominated by Indian brands. We also understood that we had to make our collection colourful. We studied all these things and then opened our first store in Indore in March 2006,” says Kumar.
The Growth Story
MAX worldwide is present in 16 countries and in India too, the brand spread its wings far and wide, fairly rapidly. In its first year, MAX India spread to Indore, Hyderabad, Lucknow, Bangalore and Delhi-NCR.
Today, says Vasanth Kumar, their store count in India is 145 and 98 per cent of these stores are raking in profits.
“We were clear that we did not want to expand for the sake of expansion. We decide within two years whether or not to run operations in India. If as a company we had seen that the customer profile was a miss-match to our store, then we would not have pursued the Indian market. For us, it has been a conscious decision not to enter Tier III markets,” says Kumar.
Keeping in mind the fact that the brand is profitable, Max India plans to open one store every week. By the end of the current financial year (2016-17) the store count is expected to reach 190. The brand is targeting a turnover of Rs 3000 crore by 2017-18, the current turnover being Rs 1800.
Kumar says the brand has grown simultaneously with malls in India.
“70 per cent of our stores are in malls and 30 per cent are standalone stores. This was a conscious decision because we wanted to reach markets where there were no malls as well. We didn’t want our business to be dependent on malls. Due to this balance, a mall slowdown will not really affect us. Out of the 45 stores slated to open this year, 20 are standalone stores,” he says.
The Brand Journey
“I can divide our journey into three phases. One is the initial formation of Max India when malls were settling into the Indian sphere and people were getting used to organized retail and the mall environment. This is when we grew – between 2006 and 2010. The market then was pretty conservative. People bought garments but the consumption was moderate. We also had fashion that was moderate – ethnic wear dominated the womenswear segment and western clothes were restricted to the youth. This was true for the whole country expect for Mumbai, were people were more prone to Western clothes. Hence penetration was limited,” says Kumar.
He adds, “The second phase was when we saw penetration of western wear with the revolution in the IT industry where a lot of women had started working and even travelling abroad for work. They got exposure to international trends and began experimenting with their wardrobe. 2010-2013 saw a rapid growth of women’s western wear. Kids wear and menswear was doing well always. Ethic wear in women was conservative and western wear was less. These two changed between this period. Ethnic wear became more trendy as a lot of fashion shows started happening in cities as well and designers came out with fusion collections. IT led the growth of Western wear, especially in South India and Delhi.”
Kumar says the third phase is when the real boom happened – 2013 onwards, thanks to e-commerce.
“E-commerce opened up the entire market. They had big budgets, big ads and exposed people to never before seen fashion trends. They roped in international brands and Indian consumers were hooked to their digital catalogues. Social media did the rest. Consumption went up a lot. Retail, as we knew it, completely transformed in India,” he says.
Key HR Initiatives in 2015
One of the main initiatives that was carried out in the company last year was the People Pulse – Employee Engagement Survey. This survey helps the brand to understand the engagement levels of employees and employee satisfiers. Feedback shared by employees is consolidated to arrive at a manager-wise scorecard shared with respective teams. Based on this scorecard, employees participate in improving the areas of concern by coming up with action plans which are reviewed on a periodic basis.
The People Survey is:
- Administered through an online survey to the employees who have access to computers and paper and pencil survey for the front-end staff.
- Administered by the third-party to ensure integrity, fairness and anonymity
- Covers areas such as people management, communication with senior leadership, work environment, team dynamics and so on
- Popularly accepted as an important channel of feedback with over 95 per cent of employees responding to the survey
MAX India has received the Great Place to Work award for three consecutive years.
Connect over Coffee – Skip Level Meetings
It is important to foster two-way communications in a team and ensure that everyone follows an open-door policy to enable the employees to speak. To encourage this culture within teams, skip-level meetings are organized every quarter at the corporate office.
A Whistle Blower Policy
This policy ensures the highest standards of openness and integrity. The initiative has its roots with a commitment to the highest possible standards of openness, integrity and accountability.
The policy was introduced to create a fearless environment for \employees wherein they can report any instance of unethical / improper practices whilst maintaining their confidentiality. It educates employees on the various situations under which they can raise a red flag to the Audit committee.
I-connect: Landmark Group’s Intranet
i-connect is Landmark Group’s intranet which provides all the information and announcements that enable employees to work seamlessly in the organization. The discussion board on i-connect enables employees to ask questions, which can be answered by anyone in the organization, breaking the location barrier and enabling collaboration across the country.
Basecamp is a web-based project-management tool that offers to-do lists, milestone management, file sharing, time tracking, task assignment and a messaging system.
Retail Strategy Meet is a regular feature that brings all the thought leaders from various functions together to embark on new milestones every year and to celebrate the previous year’s achievements with utmost zeal and enthusiasm.
Keeping the Landmark standard in mind, a lot of attention is paid to quality at Max. The buying team works in close collaboration with vendors.
“Our buying team is very large, with about 50 members. They work with vendors to maintain and ensure consistency in quality. We ensure our production lots are consistent and of good quality,” says Kumar.
National Brands & Max’s Private Label
Max stores range from 8,000 to 12,000 sq. ft. (their smallest store is 8,000 sq. ft. which has been recently opened at Panvel) and 95 per cent of the available merchandize at the store is Max’s private label though menswear and womenswear have a national brand each.
“In 2011 we broke even. We went into a typical model that is a close to 100 per cent private label. Majority of the players in the market do a 50:50 of private labels and national brands because managing fashion and customer tastes are very difficult. In each category there is just one outside brand. For e.g. in womenswear we have W and for menswear there is Peter England. These brands come at a higher price point,” says Kumar.
Given the size of their stores and the target audience and category they cater to, there is no other brand in the country that can claim to come anywhere close to Max.