What are the prerequisites that manufectures and exporters use while building their brand; capacity and expertise
27th, June 2020 - Guest blog
The organization of foreign trade and commerce of a nation tends to mirror the expansion and specialization accomplished in its profitable structure alongside its pace of progress and auxiliary changes which in turn talks about the growth of the country and it's GDP as a whole.
At the beginning of freedom and the very dawn of the same, the complete export basket of the entire nation and the trading system expanded, we started manufacturing ready-made clothing and exporting it for foreign and well-reputed brands.
This is basically how the country turned into one of the main manufacturing hubs for the world, seeing the rise in GDP with the same, the support level from the government kept increasing day by day, however like all good things, the same came to an end. The support kept on diminishing and export was severely affected by the high cost of raw materials, labor, increasing overheads, decreasing profits, and a drastic decrease in export incentives and drawbacks.
This is when the country took a turn towards modernism and turned into a consumer market from a sourcing hub. With the dawn of the internet with trend awareness as well as fashion influencers, people started following in the footsteps of major brands, and all the products that were produced in our own country at minimal costs, now ended up being sold back to the same population. Though brands had direct access to consumer base hence the retail margin was enjoyed solely by these brands as they basked in the glory of the attention that they were getting.
This is when the neighbouring countries started gaining more attention from these brands because of cheap labours, lower compliances, and lower tax rates which helped them to keep the cost of production low. The export and manufacturing market in India saw a massive period of recession and the entire market as well as the people involved in it, faced a major hit.
However, the brands that chose to remain with Indian manufacturers kept getting more and more stringent by the day leading making most of these exporters struggle to grow. The number of losses surpassed profits for most of the Indian manufacturers and exporters as many of the same kind collapsed as it became tougher to sustain overheads and run factories at ease.
The astonishing fact is that these exporters of India were still assisting the global brands to reach a different height in the retail and online sectors by giving their expertise and capacity of production. India as an export hub and as a consumer has always been dependent and overwhelmed by the international market. However, the Indian consumer being unaware of the fact that the international brands which they go all gaga over and are ready to spend a good amount of money on, are actually manufactured in Indian manufacturing units itself through these export houses, and after adding a lot of markups they come back to their wardrobes.
Though some of the decade-old huge export houses were still sustaining with the loyal set of buyers. Though now amidst the recent pandemic of novel Coronavirus which has made it hard for every big and small exporter and manufacturer to sustain and has created a paranoia amongst them under the anticipation of major cancellations as almost every buyer has canceled or held the Summer stock as the main buying markets filled with recognizable brands are from the US and European market. In fact, Bangladesh the second-largest garment producer after China is expected to lose roughly 6 billion $ in export value amid cancellations from some of the world's largest brands and retailers.
The strength was their capacity and manufacturing however, now that strength has become the liability as the backend capacity is not utilized leading to a rise in overheads making sustainability challenging, also resulting in unemployment from top to bottom. India lacks global standard brands as most Indian local manufacturing isn't compliant or quality-conscious, unlike the export hubs which are highly focused on maintaining quality expectations of buyers and ship orders on time with the fear of delayed shipments and air freight cost addition.
Now it makes sense for these Export houses which has a strong backend capacity of manufacturing, stalwart working processes to join the campaign Make in India and Digital India to use the existing capacity and backend to create their own brand which can be consumed and sold directly to consumer on retail margins rather than manufacturing margins. As the quality of manufacturing , backend capacity, and fabric sourcing of the exporters is very strong and compliant hence it is comparatively plain sailing for them to create their own brand compared to the current pool of new-age brands struggling to keep profits amidst the current extremely price-competitive market.
In such a way the exporters can cuts down the dependencies on the external brands and buyers and give themselves a long- term edge. However, these exporters have a certain pattern of the working structure as they are au fait with only producing but oblivious to the other aspects of being a brand.
Here, our idea of business architecture gained the spotlight, our experts from fashion and business background, saw how essential the idea of working and holding hands with these manufacturers and giving them sole-support to build their own brands became, this grew in the economic ladder like wild-fire.
As brand architects, we connected the factories and the customers and helped them grow from their initial stages to the right direction of success and go up the ladder of popularity. They recognized the fact that even though manufacturers had no problem with making the clothes, the fact that they had no idea what to make to be able to compete with foreign brands in the market, this problem was solved by creating the perfect team to handle all the operations, designing and giving them support at every stage, using the right level of market analysis and amazing support in terms of planning till the point of the right growth.
It's a Business Process Reengineering model by decreasing the need for management layers and accelerating the information flows using the existing business model to take the brand into the D2C market which is from the factory's floor to customer door. The product and brand-centric model is to analyze the Product Market Fit (PMF) using the capabilities and expertise of the backend setup of the exporters.
They needed support at every aspect of the brand making right from the brand name to product R&D, sourcing the fabric, creating exclusive prints, penetrating into the right market, the complete sales plan, ROI planning, inventory analysis, replenishment, achieving the target sales and expansion into different markets. This is further broken into very minuscule parts like creating tech packs, cataloging, and photo-shoot.
The new uncertainty and challenges can be embraced by the export lead brands and as soon as the scenario is under control they can revive their parallel business swiftly as they have direct access to the consumer base.
With the current situation, as many of these orders have been collapsing wherein being a brand comes as a rescue making the Indian exporters from buyer dependent to taking their own brand to the customers.
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Mr. Mithun Bhardwaj
Mr. Mithun Bhardwaj, Director, Zashed Fashiontech