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Ruchi Sally, director of Elargir Solutions Pvt Ltd, tells Fibre2Fashion.com about the global fashion and retail industry, its strengths and challenges and the solutions it offers to clients worldwide.
What is the size of the global apparel and fashion retail industry? How much of this is claimed by India?
The global apparel and fashion retail industry is approximately around US$ 1.7 trillion, and India’s share is approximately US$ 110 billion. In India, the apparel and fashion industry is contributing significantly to the economy, providing about 14 per cent to industrial production, 4 per cent to Gross Domestic Product (GDP) and 17 per cent to the country’s export earnings. It provides direct employment to over 35 million people. Given the sheer size and population, India ranks fourth among the largest market for apparel and fashion industry, growing at a CAGR of 12 per cent, the highest growth rate vis a vis other economies.
What has been the growth percentage across this niche in India?
The apparel and retail fashion industry was growing at a CAGR of 12 per cent in India during FY 2012 to FY 2015. Considering the increasing demand pattern for global brands and fashion-conscious consumers, new entrants like H&M and Gap entered India. This trend was further bolstered by relaxation in the FDI norms, like single-brand FDI acceptability. The industry promises to grow at an accelerated pace. Further, the macro-economic trends, including low inflationary impact and high GDP growth rate further provide more disposable income at the hands of the working population and accelerate the industry growth. This growth trend has been a bit subdued on account of the depreciating Indian rupee that makes import all the more expensive.
What are the challenges that this niche faces and what is the strategy to counter them?
I would say that data and trend are among the important factors for the growth of the retail fashion industry. While developed economies have fine-tuned data capture, developing economies like India find it a bit difficult to capture data and forecast trends. The other challenge, with the advent of globalisation of the Indian economy and entrance of MNCs, is logistics management. In a country like India, it is not easy to forecast and manage the Just-in-Time inventory solutions that are the cornerstones of success of the global fashion and retail industry. Other factors closely linked to the above issues are: optimal inventory levels, scalability and changing demand patterns. This industry is highly competitive, and brands are fighting for the same luxury disposable income of the consumers. The sustainable strategies in this industry are change and constant innovation. Change is the only constant that can pull revenues and provide foundation for growth. Companies must innovate with new products, understand the demand-supply patterns very carefully while forecasting, plan on revenue maximisation strategies by maintaining optimum inventory cycles and ensure scalability and visibility.
What HR policies do you recommend to your clients for them to attract and retain skilled labour?
Human resources are the most important part of an organisation and hiring a suitable resource is the key. Having resources who understand the vision of the company and synchronising their efforts towards the goals, even if they are hired to do a task or activity, are assets. They must be retained and taken care of. We, at Elargir, believe employees treated well, take good care of customers. Recognising and rewarding employees on performance, creating opportunities for them to showcase their talent, supporting them on wages and salary, training them and having a healthy relationship with them are extremely important and indispensible for a healthy company.