Tuesday, May 15, 2012: 08:58:17 PM


Shopping for Affordable Luxury

Rajesh Jain – Director and CEO, Lacoste India, shares his views on the future of the apparel retail industry in India, with Maunesh Dhuri

Freakin' Awesome! Freakin' Awesome! Freakin' Awesome! Freakin' Awesome! Freakin' Awesome!

The Indian apparel retail industry is growing at breakneck speed. Various segments, especially premium and branded apparel, is fast capturing the mind of the modern Indian shopper. Rajesh Jain dissects these trends in the Indian retail market in a conversation with Maunesh Dhuri.

What are the key marketing strategies that have benefited the growth of Lacoste in India?
As Lacoste has continued to grow over the past few years, our marketing outreach too has expanded to our benefit. We have made a conscious effort to increase our visibility and make the brand more reachable. We received a very encouraging response to our Unconventional Chic brand campaign that we started 2011 onwards. It intrigued the consumer and helped in generating increased interest in the brand. Since then, we have been supporting events connected to the legacy of Lacoste. Through a media outreach programme, we have been able to engage with the relevant consumer set to influence their purchase decisions.

Does the Indian market still need an acquaintance with foreign brands?
The well informed, experienced consumer of today requires no introduction to an international brand. They are becoming increasingly self aware and conscious when looking for options. They conduct their research well and hence make an informed purchase decision. With the evolving tastes of Indian consumers and their eye for seeking the best, the Indian marketplace is becoming increasingly important in the luxury segment. The emerging economy and relaxed FDI rules have paved the way for entry of many luxury and premium brands in India. As foreign brands enter India, they are engaging smart consumers with smarter customised offerings. Engagement of such a discerning consumer requires attention to detail and the ability to provide a shopping experience at par with their familiarity of brands across the globe.

How dynamic is the Indian apparel market? What is its significance on the global platform?
The apparel market in India has moved from un-branded and unorganised retail to branded and organised systems. There has been a constant move from lower to mid to premium to luxury segmentation in the industry. The upper segments of the market are growing faster.

Ethnic wear continues to play an important and significant role in Indian consumerís choice of apparel,. It has been observed that the urban population is increasingly adorning and purchasing Indian ethnic wear to celebrate occasions and festivals. For daily wear segment, the urban metropolitan consumer is skewed towards purchase of western and Indo-western attire for formal and casual occasions. The consumerís affinity towards international brands is also increasing by the day with more exposure due to media and global travel. The Indian customer today is aware of the global fashion trends and is very sensitive to design elements, quality and finish. International brands such as Lacoste, are very keen and optimistic on Indiaís growing apparel market, which, due to unprecedented expansion of organised retail, is expected to grow at a very fast pace.

The retail industry has witnessed a trend of various labels establishing a foothold in tier II and III cities. Does Lacoste have similar aspirations?
Since the last decade, Lacoste has been promoting a whole new lifestyle corresponding to its original spirit. The brand has become more fashionable, younger and trendier in its character, offering a wider collection with various fits and premium products with fabric innovations. The emphasis has also been on providing a superlative brand experience, through larger stores with new interiors, and a very professional and personalised customer service. The brand was always positioned as a super premium brand, and has created its own niche in the affordable luxury segment. Thus a selective distribution policy is essential to keep the exclusive positioning of the brand. The distribution strategy at Lacoste is led by one or two flagship or Premium stores in each of the key cities i.e. Delhi, Mumbai, Bangalore, Chennai, Kolkata and Hyderabad, with approximately 1500 sq. ft boutiques in other key retail developments.

We currently have more than 33 Points of Sales (PoS) as flagships, boutiques, franchise and presence in MBOís like Shoppers Stop, Lifestyle, Central and Kapsons. Apart from expanding presence in Metro cities like Delhi, Mumbai, Hyderabad, Bangalore, we are increasing our footprint in NCR region, tier-II cities like Pune, and Chandigarh, etc. We are also keenly watching retail developments in the next tier cities as well.

How has consumer behavior changed over the years, with respect to the apparel industry?
Globalisation of the economy has triggered a change in consumer behavior. With better education, entrepreneurship, global travel, MNC jobs, influence of media, the Indian consumer is being continuously exposed to an international lifestyle with more evolved sensibilities towards global trends. Today, the consumer expects a shopping experience that parallels their travels abroad.

A discerning consumer, thus actively undertakes an effort to connect international brands available in the domestic market. These well informed consumers are delighted to find this international retail experience at our boutiques across India. Our consumers today are not looking to buy only polo or a shirt, instead they go in for a complete ensembleónot just a matching trouser, but matching accessories too. The Lacoste stores today are a complete one stop shop for any family, with men seeking the perfect trouser and a pair of shoes to complete their look, women purchasing bags that complement their sporty attires, and kids wearing all that is chic and stylish.

Has the recent decision to increase FDI in single brand retail to 100 percent equity changed Lacoste’s business strategy?
We have not been affected by FDI in single brand retail. We continue to work on expansion and growth through customer service and international quality offering. In the Lacoste ecosystem, the Indian market is of strategic significance, as India is an emerging premium and luxury retail destination.

In the past decade, India has seen a rapid growth in the retail industry. What trends does Lacoste predict in the coming five years for Indian apparel retail?
Indiaís apparel market is evolving with time. The emerging economy and growing urbanisation has created a new set of consumers who are willing to make an extra effort to look well turned out and feel confident. Hence they are also open to the idea of experimenting with fashion.

In 2010, India saw ‘86 bn ($8 bn) in ëwestern wearí sales, that is, some 131 mn garments. Of this, just ‘5 bn ($100 mn) comes from the ëluxury marketí and the ëaffordable luxuryí market, within which Lacoste operates. Though small, this tiny market is growing at a rate of 13 percent every year, and is slated to touch ‘9.6 bn by 2015.

Financial independence, increase in purchasing power, underlying economic growth, population expansion and the rapid construction of organised retail infrastructure are key factors behind the growth forecast. Since the middle and upper class consumer base is expected to expand further, there will also be opportunities in Indiaís tier II and III cities.

As sensibilities towards fashion and trends are evolving, it has been noticed that consumers are willing to explore various styles to enhance their personality. Openness towards new silhouettes, colours and fits have increased. As the fashion conscious consumer continues to experiment, we expect this to translate into an increased market size. As time progresses, Indian consumers will be spending more on what they wear.

What are the future plans of your organisation?
We are looking to double our points of sales in three years time and a growth of around 40 percent on yearon- year basis for the next couple of years.

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