Local apparel brands like Mandhana Retail, Flying Machine bet on small towns
Smaller towns and cities are home to a chunk of India’s youth and they are exposed to global fashion, thanks to heavy penetration of internet and mobile phones.
Manish Mandhana, whose company Mandhana Retail markets Salman Khan’s brand Being Human, had two years ago started a brand Breakbounce for the youth in Tier II and III. “It is targeted at the youth in Tier II, III markets who are becoming very fashionable,” Mandhana said adding that almost 70% of Breakbounce’s sales come from smaller cities.
Smaller towns and cities are home to a chunk of India’s youth and they are exposed to global fashion, thanks to heavy penetration of internet and mobile phones. Also, the rapid growth of e-commerce is helping customers in smaller towns to keep pace in fashion with their counterparts in metropolitan cities like New Delhi and Mumbai.
Furthermore, the supply of better retailing infrastructure is now allowing brands to add outlets in smaller towns. Sri Lankan intimate-wear brand MAS Brands, which sells high-end lingerie products under Amante label, is now enticed by the prospects in small towns of India and is foraying into an affordable segment to cater to the needs of the customers in Tier II and III cities. “Every woman has a right to wear good lingerie and so we are extending an affordable line,” said Smita Murarka, head of marketing MAS Brands.
Arvind Brands’s Flying Machine sells in all cities of Rajasthan, Uttar Pradesh, upcountry in Maharashtra, West Bengal, Tamil Nadu, Andhra Pradesh and others. Now, Flying Machine is also expanding its foot print in Bihar, Jharkhand and other states. “Now the preference for brands is Tier II and III cities.
These are cost effective markets where demography is better. We have the largest distributions in Tier II and III cities. In fact Flying Machine has presence in Tier III IV also,” said Alok Dubey, CEO, Lifestyle Brands Division, Arvind Brands. On top of that there is no competition from global brands like Zara, H&M and the list of influx of foreign labels is ever increasing as Japan’s Uniqlo, US-based Ralph Lauren and Abercrombie & Fitch among others are readying for India foray.
“Tier I business is becoming very competitive as there are lots of big global players and it is not easy to break into Tier I markets. So we see growth in Tier II and III,” Mandhana of Breakbounce said. Reliance Retail also plans to open stores in more small cities and towns over the next year under aggressive expansion targets, its chairman Mukesh Ambani said during the latest annual general meeting.
According to consultancy firm CBRE’s report on India’s “Organized Retail Market” released earlier this year, retail market is expected to grow to $1.1 trillion by 2020 driven by income growth, urbanisation and attitudinal shifts.The organized retail sector which is estimated to reach approximately 18-20% of the total sector, by 2020, is growing at a high rate of 20-25% per annum.