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The govt. realises the importance of domestic market: Rahul Mehta, CMAI

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Shiv Joshi
Shiv Joshi
An editor with over 20 years of experience across industry verticals and content formats from tabloids to magazines, he is the Deputy Group Managing Editor at Images Group.

Rahul Mehta, chief mentor of CMAI on Indiasize, the government’s focus on domestic retail, industry’s demands and more

The India opportunity for retail business is massive, considering the country’s population is over 1.4 billion. And the government is keen on tapping the opportunity by growing retail. It is constantly in dialogue with industry representatives to understand ways to maximise the potential. One such closed-door meeting was held at Bharat Tex 2024 at Bharat Mandapam, Pragati Maidan recently.

In a meeting anchored by the Clothing Manufacturers Association of India (CMAI), Shri Rohit Kansal, IAS, Additional Secretary, Ministry of Textiles discussed ‘Retailing for the Future – Capitalizing on India Growth Story’ with Rahul Mehta, Chief Mentor, CMAI; Harminder Sahni of Wazir Advisors; B.S. Nagesh, Founder TRRAIN & Chairman, Shoppers Stop; Ashish Dixit, Managing Director, Aditya Birla & Fashion and Retail Ltd; Lalit Agarwal, Managing Director, V-Mart; Vineet Gautam, Chief Executive Officer, Bestsellers India; Manish Kapoor, Managing Director & CEO, Pepe Jeans London; Amitabh Suri, Chief Executive Officer, Arvind Fashions Ltd.; Sanjay Vakharia, Chief Executive Officer, Spykar Lifestyle; Siddharth Bindra, Managing Director at BIBA Apparels;  Nikhil Mohan, Founder, Blackberrys; Anant Daga, Managing Director, TCNS Clothing, Mayank Mohan, Promoter, Mohanlal & Sons and Manjari Upadhyay, CEO Domestic Retail Business, Welspun.

In an exclusive interaction on the sidelines of the event, Mehta of CMAI spoke to IndiaRetailing on the government’s focus on the domestic market and retail, the industry’s demands, innovations in the industry and much more…

What potential does the government see in domestic retail?

The government has finally realised the importance of the domestic market. Whilst not identifying it as fashion retail or mass retail, for the first time they accepted the criticality of the domestic market in helping them achieve the objectives and goals they have set. What the additional Secretary mentioned was that out of the $350 billion that they are looking at as textile growth five years from now, $250 billion is supposed to be from the domestic market.

What steps is the government willing to take for it?

While nothing has been indicated as of now, what we have asked for is to accord industry status to retail—currently retail is a state subject which leads to complexity arising from a different set of regulations retailers have to comply with in every state.

Creating a retail expansion fund on the lines of the Technology Upgradation Fund to help brands subsidise their growth into more markets is another task. The third ask is if Indian brands could be treated on par with international brands by encouraging more homegrown brands—today, they do not seem to have a level playing field. On the other hand, international brands were asking for simplification of FDI rules to enable them to expand in the Indian market.

There is also a suggestion that if we want to increase our exports, we have to focus on promoting Indian brands globally and not just be happy with the job working model that is currently being followed. Simplification and de-regularisation are other asks.

What was the response to these asks?

The additional secretary did not respond in any specific way except to say that the government has recognised the importance of the domestic market and we will do all that is required to promote it.

INDIAsize chart is a big project the industry is working on. Can you tell us about its status and CMAI’s role in it?

The whole idea of INDIAsize is to come up with a set of measurements which could more or less represent the Indian size on the lines of a US, UK or European size. The sizes are being developed by the National Institute of Fashion Technology (NIFT) after having done its due study of 25,000 people across the country.

CMAI’s role has been to support NIFT in terms of validation of the data they are collecting and certain practical inputs and suggestions on the sizes. There is a whole technical team formed by CMAI which has been working with NIFT for the last year and a half.

The final chart has been prepared and was supposed to be launched at Bharat Tex but has been postponed due to some reason.

Now that the sizes have been finalised, what are the next steps?

What we are asking is that the sizes be shared with us so we can try them out with our customers. So far, it’s all been on paper. Let us create some production on these sizes, show them to our consumers and get feedback, which will make it easier to adapt. The sizing is final. However how strongly the industry will accept it will depend on the result of this validation.

Once validated how long will it take the industry to implement?

It will not take anything less than a year to two. That’s because retailers already have existing inventory. Also, nobody is going to suddenly change their sizing as customers are now accustomed to the existing sizes and retailers risk losing 50% of their consumers. So, they will want to do it gradually. They will make one style with the new set of measurements, give it to the customers, and get customer feedback. So, all this is going to take some time.

How has the industry’s response been to INDIAsize, especially that of global players in the Indian market?

So far there’s no clear reaction because they don’t have the actual size but in principle, everybody agrees that we should have such a sizing because it will be good for consumers as well as retailers. Everything goes up—consumer confidence goes up. She doesn’t mind buying, but today she will not buy unless she is there at the shop herself. Tomorrow, she can order it online—where the rate of returns is almost 30%. Look at the amount of wastage that is being faced by the industry, if that comes down to say 15% or 10% due to correct fits, it will make a huge difference in the profitability and the costing and consumer convenience. Today, you are making tens of thousands of stocks without really knowing whether this is the correct sizing or not. Now once you have a slightly better idea that this is the ideal size, your production will be monitored, your inventory will come down, and the inventory carrying cost will come down. All this in principle, is very welcome. How practical it will be that will need to be seen.

Speaking about adopting new things, what kind of tech innovations are we seeing in fashion retail?

More people are moving on to omnichannel, more people are moving to trials through artificial intelligence and virtual trials. A lot of retailers have adopted RFID to keep a closer watch on where the inventory is and what inventories are running short, what is excess. So, all these innovations are happening.

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