Rajesh Jain, the managing director and chief executive of Lacoste India, talks about the challenges and opportunities that the French luxury clothing brand has encountered since its entry into the country in 1993.
What is the potential for retail in India?
With favourable demographics, urbanisation, nuclearisation of families, rising affluence amid consumers and growing preference for branded products, Indian retail is growing at an exponential rate, giving more opportunities and doors to retail players. The organised retail in India is only about 6 per cent of the total Indian retail market. Given India’s economic and demographic strengths, this will keep growing. The consumers in tier one and tier two cities are exposed to international brands, are well-read and travelled and are global in their outlook.
What are some of the challenges in the Indian apparel retail market?
With the advent of more and more international brands booming in the country, increasing real estate prices … are making it difficult for retailers to maintain a stagnant cost-to-square-foot-ratio. Furthermore, increasing inflation has hit the spending of consumers, directly affecting the retail industry. Hence, the consumers are now more particular and picky when it comes to choosing brands with their preferences to trend, quality, service and choices. Most e-commerce portals bring both the unorganised and the organised sectors on to a single battlefield, offering the consumers a wide variety of apparels in various designs and outlines, yet at an affordable price point. This basically poses a threat to the organised markets, whose perceived value lies in its distinction and exclusivity.
How are you affected by the widespread counterfeit market in India?
With counterfeiting, Lacoste does face a threat of losing its sheen and faith among its loyal patrons. Also, with fake products, the top and bottom line of the company suffers a hit. Counterfeiting equates the brand to an unorganised sector that is available at an affordable range, giving no due worth to the “premiumness” and exclusivity of the brand.
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