Wednesday, July 16, 2014

Marketing Indian Textiles

More than sixty years ago, the Government of India began a noble experiment to promote Indian textiles, specifically those handcrafted textiles produced by small scale producers throughout the country.  Given the quality, unique designs, colors and dyes, the global markets seemed ripe for the introduction of products that would introduce Indian artistry and craftsmanship to consumers in developed countries through tourist sales.

The vehicle was a Government enterprise called the Central Cottage Industries Emporium, with showrooms in centers like Delhi, Mumbai, Kolkata, Chennai, and Bangalore. Having first visited the Delhi showroom with my family in the Sixties, we always took home unique items for women friends of the family, who were always excited by the unique look and feel of the apparel; wearing them on a regular basis in a Western lifestyle was, however, always a different matter, I noticed.

Coming back to that same showroom during our most recent trip to India a few weeks ago, I was appalled by what I saw.  The fixtures looked like the same particle board shelves from the Seventies, with chips and dents visible everywhere.  Displays were full of merchandise, stacked in neat piles which were good for inventory but not for pulling out and piquing customer engagement.  The floor staff, who have no incentives, were as disinterested and sullen as ever.  Light fixtures were ancient, but they now featured compact fluorescent bulbs providing awful lighting with large areas of shadows. Forget 2014, this was an experience worse than 1960.

Design is supplied largely by the suppliers themselves, who really have no idea about modern tastes and preferences among customers in the developed world, or even of affluent customers in India or in the rest of the developing world.  It is as if time had stood still, and so have the inventory turns.

My teenage daughter, looking for gifts for her friends, and my wife struggled to find merchandise that would be worn, as opposed to admired.

I thought about a proposal to privatize this business, with a revenue sharing arrangement with the government. I could already see the easy ways to rip apart the space and create an inviting store.  My cousin's daughter Shalini James had created a successful retailing operation in several of the largest international malls in Cochin.  Her expertise, along with others in our family, could be the backbone of a new model for Cottage Industries Emporium. I was excited thinking about what could be done.

However, we had already been shopping in some very attractive outlets of a fifty-year old retailer Fabindia, founded by an American in New Delhi, and now run by his son. My family, including my son and nephew, were excited to be shopping here.  I didn't realize how big their volume was, and how many stores they had throughout the country.  Their original mission was the same as that of the Cottage Industries Emporium.

Some of the big differences in the model?  First and foremost, Fabindia have their own international design staff who are connected to fashion centers in the U.S., Paris, Milan and the rest of the world.  The design input went to the artisans, who obviously weren't in a position to afford this kind of expense.  No problem: that barrier was eliminated.  Concepts of sustainability and fair compensation to artisans are corporate values.  Supply chain management is an established corporate function: no one can accept merchandise sitting on shelves as they do in Cottage Industries. The brand and values are being extended into home, including furniture recently, food and personal care items.

Another conversation ensued with a cousin who is a corporate marketing executive.  He said that Cottage Industries were already a zombie enterprise, whose largest volumes were sold to overseas visitors from foreign government delegations who were force fed into their outlets with limited time.  Other than that, he said, there was almost nothing left.  Yet, like all government enterprises, it will not be shuttered to improve the government's use of assets, but it will soldier on to oblivion, to the detriment of artisans and employees.

Indian textile exports are around $40.2 billion, about 5.2% of global textile exports. Last year, India assumed second place globally behind China.  While government may have primed the pump decades ago, it's time to abandon being a fabric retailer.

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