Arvind lines up select brands for online retail
India’s largest textile company plans to start with two in-house fashion labels, Shuffle and Prym
Bengaluru: Arvind Ltd, which sells brands such as GAP Inc., Tommy Hilfiger, Arrow and Flying Machine, plans to kick-start its online business by selling some Internet-only fashion labels.
India’s largest textile company plans to start with two in-house fashion labels, Shuffle and Prym. The brands will compete with foreign fast fashion brands, such as Zara.
The online venture is headed by Rajiv Mehta, Puma India’s former chief executive.
In future, growth will be fastest on the online sales channel, said Mehta, hired earlier this year by Kulin Lalbhai, son of Arvind Group patriarch Sanjay Lalbhai, to build half a dozen Internet-only fashion brands over the next two years.
The two brands will be sold on Amazon, Flipkart and Snapdeal by the end of October.
The brands will also be sold through Arvind’s e-commerce platform likely to be launched in 2016.
Arvind was among the earliest entrants in the branded jeans market with Flying Machine.
Since then its expansion has largely come through joint ventures and franchise agreements. It currently retails brands such as GAP, Nautica, Arrow, Lee and Calvin Klein in India. The retail business accounted for 30% of the firm’s Rs.7,851 crore revenue in 2014-15.
Sanjay Lalbhai’s sons, Kulin and Punit, are now looking to cater to younger shoppers, many of who are expected to buy 40% of their apparel and footwear online by 2020, according to a report by UBS Securities India Ltd. Last year, Kulin Lalbhai launched Creyate, a bespoke men’s tailoring brand that allows shoppers to order in store and receive delivery at home.
The company is firming plans for more such hybrid retail formats.
India’s online apparel market could touch $21.7 billion by 2020 from the current $3.9 billion, according to the UBS Securities report, suggesting significant shift in shopping formats. The numbers are pushing all major retail businesses to focus online.
Arvind Ltd’s rival Aditya Birla Retail Ltd is launching a fashion marketplace, Abof.
Establishing brands online is a quick way to bypass long gestation period and escape the high rentals of offline stores, says Anand Ramanathan, director at consulting firm KPMG India.
“This is very smart way of expanding business. Clearly, all large companies are waking up, and this is the quickest way to respond to staggering changes in the market,” he added. “As long as it’s done at the right price point and fast enough.”
Agrees Mehta, whose brands will be about 15% cheaper than competition. “Plus Internet will help me respond quicker to the market trends and see what sizes, colours move. So, we can churn our inventory far more easily as compared with a brick-mortar store,” he added.
Mehta says that the paucity of branded apparel retailers, especially outside the metros, will push shoppers to buy online.
“By the time Zara gets to Tier II markets, we want to already build a strong clout of Shuffle in these markets, at much affordable prices,” he added.
For the year ended 31 March, Arvind reported revenue of Rs.7,851 crore compared to Rs.6,862 crore for the previous year.