Despite its appeal as a high end fashion garment, the branded market for saris has only picked up in the last few years. But the metamorphosis is quite phenomenal, & two fairly recent developments promise to further up the ante

Okay, so what’s common between Mukesh Ambani and Manish Malhotra? Well, both have recognised immense business potential in tapping the market for the Indian woman’s most favoured attire – the sari. And they join an interesting coterie of established incumbents who are inculcating a strong brand culture into this hitherto unorganised market.

In fact, the intervention of branded players in the sari market has made a much more powerful impact than it seems apparent. According to an old study by KSA Technopak on the Indian clothing market (conducted in 2002), with about 197 million people buying saris on an annual basis, saris were the largest selling apparel item. A decade later in 2012, the sari market is extrapolated to reach an astonishing Rs.74 billion; with 40% of it to be taken over by branded saris (according to the KSA Technpak report, branded saris covered only 2% of the sari market in 2002). A decade back, branding of saris was done by a few national-level manufacturers such as Roop Milan, Garden, Parag and Nalli’s. But extensive branding or creating large retail chains was not a regular phenomenon. But now marketers are gearing up to create their individual sari brands and even getting into exclusive tie ups with craftsmen and weavers. Leading designer Satya Paul, for instance, has already created a strong national brand and players like Nalli Silk, which also has plans to rope in an ad-agency like JWT to come out with a slogan, are looking for newer ways to establish exclusivity. “A proper positioning is a must to convert a fashionable commodity like the sari into a brand. The existing unbranded market has not done that so far,” feels Sumeet Nair, MD, InCube Fashion, who’s working with designers on branding. According to CII, designer branded saris are now growing at a rate of 30% every year. In this increasingly dynamic market, two significant developments of late promise even greater upheaval in future.

The first is the well known and acknowledged disruptive influence of India’s most profitable private company. Last year, Reliance Industries Ltd. re-launched its Vimal brand and the company is also launching a mega brand extension into saris in 2012. Vimal was quite popular at one time for the old tagline, “A woman expresses herself in many languages. And one of them is Vimal.” This would now be replaced by a theme that would combine the traditional concept with a distinctly modern appeal.

The group is largely paying heed to corporate women as its target segment. But the biggest challenge in the corporate space is the largely unrivalled dominance of western prêt-a-porter. To combat those players, Vimal is resorting to ‘online marketing’ and will cash in on all emerging media to market saris in metros, especially for corporate women. Like their other ventures, Reliance will definitely play the volume game here. Hence Vimal saris would not be limited only to metros, but would also be marketed in smaller towns and cities.

The second disruptive change for the segment is the entry of a global luxury brand. The $29 billion Paris-based LVMH Group announced last year that it will roll out branded saris in India in 2012. While the financial model that LVMH’s private equity arm L Capital is following is a bit byzantine, the business model is reasonably clear. The ritzy retailer would be investing $650 million for a 25.5% stake in Gurgaon-based Genesis Luxury Fashion. Genesis will scout for craftsmen and weavers to manufacture exclusive saris.
According to Bernstein Research, India’s spending on luxury haute-couture was around €600 million ($777 million) in 2010 and out of this, a mere 2% was spent on high-end exclusive designer saris. LVMH, whose portfolio of brands includes Louis Vuitton, Parfums Christian Dior, et al; has the marketing skills and the know-how to pitch its products in the Indian high end market (it entered in 1996, & all its brands are present in the metros). The company firmly believes that the stark absence of high-end branded saris is indicative of the massive potential. Besides, LVMH’s saris would not be limited only to the domestic market. “Our investment and knowledge will connect craftsmen and weavers with the global luxury market and help them grow faster more profitably,” says Daniel Piette, President & Managing Partner, L Capital.

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Source : IIPM Editorial, 2012

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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