Denim is one of the fastest growing apparel categories in india. Launching of ‘masstige’ denim brands is one possible way to achieve this target.
Denim, perhaps the only truly global apparel, may have forayed into the Indian domain long back but it is yet to harvest its full potential from the second – most populated and second-fastest growing market in the world. Even though denim is one of the fastest growing apparel categories in the domestic market, it has managed to achieve per capita annual consumption of only 0.2 pair compared to 1 pair in China and 8 pairs in USA. If the annual consumption of denim can be increased to 2 pairs per person for the core target group of 15-44 years, the material’s consumption can be increased to more than 1 billion pairs from the present 250 million pairs. Launching of ‘Masstige’ denim brands is one possible way to achieve this target. Our belief is based on the basic nature of the new Indian consumer, who has a higher purchasing power than their parents but still looks for value from each rupee spent on their clothing.
Urbanisation is rapidly increasing in India. However, as per the latest census report, 69 percent of our population lives in rural India. Although organised retail and branded products are yet to reach them in as big a scale as they have reached urban India, but their aspiration level is no less. Penetration of electronic media and mobile phones keeps them informed about the latest in fashion trends and they aspire for consuming the same as their urban counterpart. Of course, there is a difference in affordability but no difference in the self-pride.
The literacy rate in Indian has gone up to 74 percent, as compared to 65 percent in 2001. This has improved the employability of the Indian youth and thereby their affordability to make purchases. Per capita income of Indian consumers is increasing steadily and touched `39,961 (at 2004-05 prices) in FY 2013-14. India is also home to one of the youngest population with median age of 26 years compared to 36 years in China and 37 years in the US. The young executives of both manufacturing and service sectors love to spend on themselves but still look for value. Brands that complement their style and personality while fitting into their budget are topmost on their criteria.
If Nokia can offer them a mobile handset or McDonald’s can offer them a burger, why cannnot a pair of denim be made affordable to them? But, if we look at the presence of different denim brands in India in different price brackets vis-à-vis distribution of Indian households as per total household income, there is a huge disparity. Most brands are cluttered in the premium and super- premium categories, which can be consumed by hardly 5-7 percent of Indian households. Limited number of jeans priced below `1,000 is offered by limited number of brands, who again have mostly failed to build the ‘prestige’ value. Value-seeking Indian consumers are still on the lookout for choice of ‘Masstige’ denim brands.
It is interesting to mention here that discount retailers like Walmart and Carrefour offer a pair of jeans below US$ 10. Besides the limited product offering in target price- points, we have observed challenges with respect to reaching out to the target audience, product diversification, consumer education, communication and manufacturing of denim products in the Indian context.
Availability is a major issue with denim products. Most denim brands are still concentrating on metro and mini-metro cities. Value denim brands like Killer and Moustache have reached ~250 cities with 1,000+ points of sale. This number is too low once compared with the reach of national brands of innerwear category. Innerwear brands have reached even the remotest corners of India and are even available at the convenience stores. Of course, online retail has created a platform to reach a wider base of consumers, but still they want to touch and feel the product or brand before making their first purchase. The ‘Brick & Click’ retail model may be useful in this case. Physical stores will be required, especially for a new brand, to convince the consumer on quality and fit. Once a consumer likes a product, they can place the order either at the shop or using any other online platform. The product will be delivered directly at the consumer doorstep as like the case of any other retailer. This will reduce inventory level at the store and thus the overall costs, which will help to make the product more affordable. It is the ‘Masstige’ brand, which has to walk up to the consumer and make itself available even in convenience stores, if required. One Indian innerwear brand tried to launch a mass denim brand and distribute it using their existing distribution setup.
DENIM BRANDS NEED TO CREATE MORE OCCASIONS OF WEARING DENIM AND SHOULD ENSURE THAT THE SAME DENIM IS NOT USED FOR ALL OCCASIONS. IT IS IMPORTANT TO EDUCATE CONSUMERS ON THE SAME, EITHER BY INDUSTRY BODY OR BY LEADING BRANDS
However, it failed in this endeavour mainly because consumers did not find any ‘prestige’ value in wearing a brand, which is positioned as innerwear. We as retailers cannot afford to take the prestige value of new Indian consumers in a light vein. We must offer them a pair of denim within their affordable range and make them feel proud of wearing the brand.
Denim brands also need to create more occasions of wearing denim and should ensure that the same denim is not used for all occasions.
It is important to educate consumers on the same either by an industry body or by a leading brand. Platinum Guild has successfully increased the market size of Platinum products in India. It is interesting to see how Cadbury has changed its positioning and consistently worked on increasing the target consumer base and consumption occasions. It is again a perfect example of consumer education and developing that connect. In 1948, when Cadbury Dairy Milk began its journey in India, its target consumers were kids. It became a market leader in its segment but for further growth it required more consumer base. In 1994, it repositioned itself with the campaign of ‘Real Taste of Life’ and targeted all family members rather than only kids. This campaign awakened the child in every grownup. The implicit message was the reinforcement of the fact that chocolate is an impulsive purchase and should be eaten whenever and wherever you feel like. The sales for Cadbury chocolates grew at a CAGR of more than 40 percent for the next few years. In 1998, it launched Rs. 5 packs and made the product more affordable to Indian consumers. In 2004, it set a target to compete with the Indian sweets (mithai) and create more occasions of consuming Cadbury chocolates. The series of campaigns like ‘Kuchh Meetha Ho Jaaye’, ‘Shubh Arambh’ and ‘Meethe Mein Kuch Meetha Ho Jaye’ are positioning Cadbury chocolates as an alternative for Indian sweets for occasions like festivals, family functions, beginning of an auspicious task and even for traditional dinners. So, Cadbury has not only increased its consumer base but has successfully created more purchase occasions. Similarly, the denim industry should focus on increasing its consumer base, occasions of wearing and wearing different denim products for different occasions. Denim brands should offer a complete outerwear wardrobe along with matching accessories.
They should offer products in different colours, styles, finishes and even experiment with different fibre mix. Some of the manufacturers are already using polyester in warp direction or more Elastane fibre even for men’s denim products. This helps in reducing cost and improving functionalities. But offering a wider choice alone might not do the trick. We need to educate or influence consumers that the same denim product should not be used for all occasions, which is one of the major reasons of lower per capita consumption of denim in India.
Communication will also play a major role in building this mass market for denim products. Long life of the product, easy maintenance, product for all occasions and all seasons but still stylish enough to improve your image within your society and peer group are some of the messages that need to be conveyed effectively. Writing on the bare brick wall may not be the ideal tool, but an intelligent mix of social, print and electronic media will be helpful. Let’s not forget about those 45 million plus active users of social media, who are from non-metro cities. Around 60 percent of the total sale of online retailers comes from non-metro cities. The Internet and social media might be good options for communicating with the target group effectively. Communication in local languages but still using an icon with ‘prestige’ value associated with the consumer should help.
The Indian denim apparel manufacturing industry also needs to be stronger with larger capacities. Today, although India is one of the largest manufacturers of denim fabric, it stands nowhere in denim apparel manufacturing. As a result, 30 percent of installed capacities for denim fabric manufacturing remains unutilised in India and about 25 percent of denim fabric production goes to other countries for getting converted into garments. Indian apparel manufacturers need to improve the efficiency of their sewing operators, which will have a great impact on the production cost and will help ‘Masstige’ brands to offer a pair of denim of affordable range to their target consumer segment. Unlike other apparel products, finishing is applied in garment stage for most denim products. Again, Indian apparel manufacturers lack in this technical expertise and mostly do not have such facilities. The Indian government may play a crucial role in supporting such capital-intensive investments for technology up-gradations.
Future of Indian economy is looking brighter, and the so-called Indian middle class will be even larger in volume and value terms. Connected with the world, they will demand higher value from each rupee spent. Overall, it is a good time to build ‘Masstige’ brands for denim products.