Entrepreneur India – July 2019

8686 l l ENTREPRENEURENTREPRENEUR l l JJUULY 2019LY 2019

Rs 10 lakh for initial stocks.
Moreover, most of the
brands ask for Rs 2-4 lakh
as franchise fee. Agarwal
estimates operational
expenses may range from
Rs 1.6-2.85 lakh, which
largely vary on the rent
that could be between Rs
80,000 to Rs 1.5 lakh. Three
sales staff and a manager
are required to run each
shop, which accounts for Rs
50,000-70,000 in salaries.
In addition, miscellaneous
expenses take up Rs 10,000-
15,000.
Most of the ethnic wear
brands promise excellent
margins of 30-50 per cent.
With monthly revenues of Rs
9-12 lakh within 3-5 months
of operations, ethnic wear
stores can expect operational
break-even within 3-4
months. Revenues during
festive and wedding seasons
could top Rs 15-17 lakh
per month. Moreover,
most of the brands have a
refund system for unsold
inventories at the end of the
season.
However, ethnic wear
brands are highly selective
about store locations. “W
is present in more than 100
cities through exclusive
stores. We target main
markets of the cities. Highly
visible shops at malls and
high streets work well for
us,” says Lalit Raghuvanshi,
vice president-sales, TCNS
Clothing, which owns W and
Aurelia brands.

Luxury Brands

Follow Suit
The success of Spanish fast
fashion retailer Zara in India
is often considered as a case
study by itself. For, not every
brand that has entered the
Indian market has managed
to sell more than US$100
million worth of products
in a short span of five years

after it opened its first store

in 2015, in a joint venture

with Trent Ltd. Like Zara,

many global brands that have

entered India over the past

three years. In the last two

years alone a legion of fabled

global fashion brands like GAP

Inc, Spanish brands Women’s

Secret and Springfield,

Italian children’s wear brand

Monnalisa and Chinese fast

fashion retailer Yoyoso have

entered India.

With over one billion

population and many

millennials turning to

western style clothing for

fast fashion, India is one of

the most prominent markets

for American and European

apparel brands. Commenting

on why India is an important

market for global brands,

Adeeb Ahmed, Managing

Director, Tablez India, says,

“Customers in India are well-

travelled and vastly exposed

to the international fashion

brands, which makes India

one of the most important

markets.”

Further, the past few years

have seen the global fashion

brands experimenting with

newer markets for better

reach and revenues. This is

fairly expected as the growth

in luxury spending in India is

30 times more in Tier II cities

as compared to Tier I cities,

says American Express Luxury

Spend Analysis 2018. The

report says that, for instance,

in Delhi NCR although the

merchant base has grown by

20 per cent from 2013 to 2018,

transactions are almost the

CUSTOMERS ARE EXPERIMENTING

WITH CUTS, COLOURS AND

HUES. THIS WILL ENSURE THAT

ETHNIC WEAR CONTINUES TO BE

CONTEMPORARY AND INTERESTING”

RAVI MODI, MANAGING DIRECTOR, MANYAVAR

Fashion