Value for money’ is one of the most successful approaches to retail adopted by the Indian apparel retail sector and now in post-Covid scenario, value retail/value segment is one of the most focused areas for growth. As per KSA market size report, middle and economy value segment is worth around Rs. 1,60,000 crore in Indian domestic apparel market (overall market size is around Rs. 2,50,000 crore) which is highest compared to all other categories including higher middle/value fast fashion, premium segment and super premium or luxury segment. Not surprisingly, few of the apparel retailers are dedicated to this segment and they are quite confident about awesome growth. One of them is Easybuy, an affordable, family retailer of the Landmark Group. Nearing seven years in India, Easybuy is nearing about 100 stores across India with an impressive turnover at no time.
Recently during the ASW Marketplace vendor meet session, Ramesh Gunasekaran, Head Sourcing at Easybuy – Max Retail Division, Landmark Group and a seasoned apparel professional, shared his views about this segment, the strategy of Easybuy and what constitutes a preferred supplier.
Strong reasons for growth
Around 88 per cent population of India lives in 6,40,000 villages and 7,834 small or medium level towns. These people constitute around 75 per cent of India’s GDP (Gross Domestic Production).
There is huge potential in this segment as aspirations of the people in villages or towns, shifting towards metro cities are on the rise and they have an inclination to buy more. However recently after pandemic, in villages or small towns, and even in metro cities, purchasing power is under pressure and a big chunk of the customers are looking for value for money.
This customer segment is not much dedicated to branding but need value for their penny. Keeping this in mind, the products of Easybuy are fairly priced 90 per cent merchandises in the price range between Rs. 69 and Rs. 699.
Sharing these facts, Ramesh says, “At Easybuy, our focus is on Tier-2 and Tier-3 cities, and by 2025, we are expecting to touch a turnover of around Rs. 3,000 crore and the store count will be 200 to 250 across India. As our market share is growing massively, we are adding stable, reliable new vendors. We are open for vendors from Bangladesh and Sri Lanka also. Large vendors can add to the benefit of large business volume.”
Growing sourcing volume of Easybuy
Moving forward, as far as growth of sourcing volume of Easybuy in next two years is concerned, the woven segment is expected to grow around 40 per cent and the knit segment will grow around 30 per cent.
It is pertinent to mention here that the prestigious Landmark group is very committed to make the vendor’s payment on time.
As per Ramesh, “We are strict about our payment terms and we strongly believe in ethical relations with our vendor base. At Easybuy, we work with medium and small entities also, so they can grow with us. There are vendors that have achieved very good growth by working with us.”
No compromise on quality or product development
Even in value segment, apparel quality or PD is not less compared to any other segment of apparel retail; products are trendy and quite attractive in this segment also. Super style, super price, super product are the three most important aspects of the apparel retail business. Price-wise this segment is low but in terms of fashion, it is on the higher side. “To get best in design, we also give our designs to our vendors and get the same from them also,” he says.
The company follows four seasons and it requires goods at the distribution centre 45 days ahead of the season’s starting. So, its vendors normally get overall lead time of 90 to 120 days from order to delivery and for specifically manufacturing, they get 4-6 weeks & maximum of 8 weeks, depending on orders’ complexity.
Support to become cost-competitive
Easybuy normally expects a men’s shirt from its vendor at US $ 3, chino at US $ 4 and denim bottom at US $ 5. In case of womenswear tops from its vendor at US $ 2, chino at US $ 4 and denim bottom at US $ 4. The sourcing of kidswear starts from US $ 1 and goes up to US $ 4 normally. The company, having a major focus on kidswear and womenswear, gives priority to the apparel manufacturers having their units in apparel parks as such manufacturers get some benefits from Government also and prove to be cost-competitive.
The retailer also strengthens cost competitiveness by helping apparel manufacturers on raw material sourcing level. As far as fabric is concerned in the product of the value retailer, it works with all leading mills. It also believes in exploring ‘buying based on opportunities’ with mills. As and when fabric mills wish to liquidate their stock or surplus fabric, in such case, mills usually don’t get good amount when they sell to stockists but Easybuy gives better pay to these mills compared to stockist & but they demand for selections not blind buy. It proves to be a win-win situation for all. Similarly, when fabric mills have a lean period, the retailer supports them by placing orders and it gets a reasonable price in return.
It also gives its annual as well as monthly projection to the stakeholders across the supply chain (right from spinning level). Its nominated spinning mills often give price advantage to them from the normal price to their apparel suppliers.
The good thing is that the vendor (apparel manufacturer) remains a part of this entire exercise. The retailer keeps apparel manufacturers in the loop during all discussions. It also gives free hands to the apparel vendors that are capable of managing everything at their own.
“To make effective and cost-effective sourcing, we source fabric from unorganised players and remote hubs also. But in any case, none of the suppliers across the supply chain is allowed to cut the corner on quality,” Ramesh says.
Normally retailers prefer apparel manufacturers who have vertically integrated set-up, but in the case of Easybuy, it is the other way around as the company feels that such set-up has huge overheads, so their operational cost may be higher. “Vertically integrated suppliers are also welcome to associate with us but they have to fit in our cost structure,” says Ramesh.
Easybuy’s expectations are reasonable and its vendors need not have certifications like Sedex, Wrap etc. Rather it is very much focused on basic compliances and there is no compromise on the same. So, no matter if a supplier is an SME or giant, if they are cost- effective, confident of giving quality and ethical in their approach, nobody can stop them from growing with this value segment retailer that is increasing its footprints in the Indian apparel retail scenario.
Source : https://in.apparelresources.com/