The Indian retail market is expected to hit Rs 1,02,50,500 crore (US $1,576 billion) by 2026, growing at a CAGR of 10 per cent.A big chunk of this number belongs to the fashion segment. Retail pundits are predicting that the Indian fashion retail market worth Rs 2,97,091 crore (US $46 billion) will grow at a promising CAGR of 9.7 per cent to reach Rs 7,48,398 crore (US $115 billion) by 2026.
The Indian apparel industry, which is the second largest contributor in the retail industry after food and grocery, is seeing some major shifts. The entry of international brands, changes in preferences from non-branded apparel to brand names, the fast-growing economy, and a large young consumer population in the country has made India a highly lucrative market.
To cash inon this immense opportunity, Splash Fashions, Middle East’s largest fast fashion retailer, plans a makeover, and will present itself to India in a new avatar.
Speaking on his big plans for the brand in India, CEO, Splash Fashions, and Director Landmark Group, Raza Beig said in an exclusive interview on the sidelines of India Retail Forum 2017: “Splash Middle East is at a very mature stage. We have already captured quite a bit of the fashion market in the Middle East.
The brand is 287 stores strong in 13 countries covering 2.8 million sq. ft worldwide. However, in India, the growth is in nascent stages.
“We have been operating in India for about seven years now but because of all the expansion that we were taking on in the Middle East, we have not been able to give a lot of attention to our Indian model. Earlier, our India operations were done through a franchise model. However, two to three years ago, we decided to takeover and conduct operations internally. Honestly, we have started working on Splash India only over the last eight or nine months,” Beig said.
He further added, “We went back and revisited the entire India model – from product to pricing. We had to re-engineer products to a certain extent to meet the demands of the Indian consumers and the traction that we have received in last seven to eight months has been really good,” he added.
There are around 18 stores of Splash Fashions – part of the Dubai- based Landmark Group – in India and Beig wants to take this number to 50 in next three years.
A Slow & Steady Pace
Raza Beig feels that aggressive expansion is not the style of Splash Fashions.
“We want to go slowly and steadily and because we have learnt a few lessons in the last seven years, we do not want to make the same mistakes. At present, what Splash lacks in India is position. We are in B-spots and even C-spots in malls. So, the fi rst thing that we need to go is ensure that we are in the right space and retailing to the right consumer,” said Beig.
In keeping with this vision, Splash Fashions closed some stores that were not rightly positioned and now plans on refurbishing the remaining stores in line with their new format.
According to Beig: “We will be repositioning all of our stores in malls – we are already in talks with mall developers for the same, and we will also start looking for spaces in existing and new malls.”
The brand, which will be spending between Rs 100-150 crore to open new stores in India, eyes a revenue of Rs 1,000 crore in the next four to five years.
Making a Splash in India
Splash, which used to retail several brands in India like all MBOs – including Benetton, Vero Moda – has decided to do away with this model. They will still be retailing Being Human and Bossini apparel and merchandise at their stores, but 90 per cent of the inventory will be purely Splash.
Beig outlined the format of stores in India, saying, “In India, our stores will range from 6,000 – 12,000 sq. ft. depending on the mall we are in, as well as the catchment.”
Stores will have the average target price point between Rs 999 and Rs 1,499. Beig said that his brand closed the last financial year at Rs 160 crore. “Going forward, we are looking at a growth of 50-60 per cent every year, year-on-year for next three years. Last financial we touched a liketo-like growth of 35 per cent, and we want to maintain the momentum.”
To stay ahead of the competition, Splash Fashions is leaving no stone unturned as far as leveraging technology is concerned. The brand is planning on investing 4-5 per cent of its turnover in this space.
Elaborating on thetechnological advancements his brand is embracing, Beig stated, “With the world moving so fast, we have to be very tech-savvy. We will soon be introducing an entire tech-based collection. This means that technology will be an integral part of the garment we are selling.”
He further added, “Two months ago, we introduced tech-merchandise in UAE to which young kids can relate to.These include phone-covers, headphones and even quirky speakers. Our India stores are just receiving their first shipment.”
And as Omnichannel retailing is continuing to mature, and the lines between the online and the physical store blurring, Splash is preparing its e-retail website in a bid to lure more customers and with an eye on profitability.
“We have launched our e-commerce website in UAE, as well as Saudi Arabia and by the end of this financial year, our online stores will be available across all GCC’s. In India, we have signed up with Myntra and we will soon be launching Splash online in India,” Beig concluded.