Featured | Interviews

Indian Garment Sector Undergoes Transformation In B2B Purchase Patterns, Payment Terms

Published: July 31, 2019

The Clothing Manufacturers Association of India (CMAI) hosted its 69th National Garment Fair at the Bombay exhibition center, NSE Complex, Goregaon, Mumbai. The 4-day event was inaugurated by Chief Guest of the Fair and President of CMAI Rahul Mehta. The B2B fair hosted over 1,000 exhibitors representing close to 1,100 brands delving into their displays and the overall ethos of their respective labels sprawled across approximately 7,00,000 sqft. In an exclusive chat with Textile Value Chain, Rahul Mehta, speaks on the expo pattern, trends in the industry. Edited excerpts.

What are the key trends you notice this year’s exhibition?

The price has definitely become a very important factor and you can no longer charge on the basis of your cost. Earlier if INR 100 is our cost and we require a 50% margin, then INR 100 +INR 50 become our selling price. Now, if INR 125 is the correct selling price and if you still want to get a 50% margin then our cost has to be below INR 75. We have to figure out how to get that INR 75. Thus, the whole thinking has turned totally, the starting point cannot anymore be your cost of production and therefore the cost of production does not determine the selling price, the selling price determines the cost and the other way round. That is the biggest change around, be it a consumer-level or at the retailer level, people are looking at the price.

How this year expo is different from earlier versions?

We have paid a lot of attention to the esthetic and overall appearances of the fair. The look and feel of the expo is different completely from the earlier versions. Earlier, there was feedback that there were no enough places for the visitors to rest. We had built lounges where the retailers can sit down.

Thanks to the online registration growing every time, the participants need not stand in the queue wasting time. We had increased the number of registration desks to avoid situations earlier where retailers have to stand more than an hour just to get them registered. The registration process gets over maximum in fifteen minutes now.

With the increase in the participants, we had made the exhibition happen for four days. This will give ample time for the visitors to plan their visit to the event. We had also designed in such a way, the navigation is easy, thanks to the kiosks installed.

Where are the visitors from?

Local visitors (Mumbai) are always more. Next, we had enough participation from the Western part of India. We had made a special focus for Tamil Nadu and Andhra Pradesh. Thus, there are about 450 retailers who are specifically coming from these two states on our invite.

How much does quality play a role in the purchase decision?

Earlier business happened through relations. Now everybody gives quality and one can no longer say that X makes good quality and Y doesn’t make good quality. While quality has become a basic fact, what we provide beyond quality matters today.  The textile industry should constantly and broadly get defined into one of two segments- either you are creating the brand or you are manufacturing a product. Manufacturing a product and creating a brand out of it demands a different skill set. Those who are good at manufacturing are moving out of the branding space and more of those who are good at creating brand are moving out of the manufacturing space, focusing on the marketing point. Given that online sale is continuing to do well, but the MBO market is not diminishing. You can witness this with the number of buyers who are attending the expo. The market is opening for small players, regional market, organized manufacturing, and organized retailers.

From a retailer point of view, other than price is there anything they look at?

Obviously the liability of service, the liability of supplies, the consistency with which you are giving your creativity and designs, variance all that also becoming important. Just because a customer had purchased once, we cannot expect them buying from us regularly. We are in constant pressure to prove consistency. Customers want faster deliveries as they cannot wait for 3 months for delivery. While buying, the customers also look at your presence online and they want your presence in small to large formats.

What trend do you notice in terms of bulk purchase patterns?

Small retailers prefer small-time brands which are not available in the large formats. In general, in large formats, there is some of the discounts happen and these people cannot sustain in the network. Retailers prefer brands or labels which are not on sale trend.  Another trend that is happening from the retailer end is that even the smaller retailers are moving to what is known as the SOR model (Sale or return). This was practiced only by Multi-branded-outlets earlier.

What is your take on the payment cycle?

Payment is becoming a major issue. In fact, it used to be worst during the 80s and 90s. In the last 20 years, it has significantly improved. But again in the last two-three years, the payment schedule has started getting longer. But fortunately, the bad debts have come down.

Are you planning to take this exhibition to other places?

National government fair has to be in one place. However, we will expand this to other places also. We are planning to have smaller events on product-focused. Expect other format events in new geographies.




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