Global fashion industry moving towards sustainable ways to thrive in the market: Shivendra Nigam, CFO, Cantabil
As the festive season approaches and the inoculation drive picks up pace across the country, players are hopeful that the festive shopping this year will drive positive growth for most retailers, with the possibility of even doing even better sales than the pre-pandemic levels. Though recovery at the moment looks encouraging across categories, retailers continue to maintain cautious optimism due to the possibility of a third wave of the pandemic. Financial Express Online spoke with Shivendra Nigam, CFO, Cantabil to know about the retail sector in India and the way forward. Excerpts:
How has the retail space changed due to the pandemic?
The Covid-19 pandemic has changed consumer behaviour and shopping patterns which have automatically affected the retail industry. People have been cautious while venturing out and online purchases have increased. However, this is more driven by a feeling of reluctance and hesitation. Other contributing factors such as decreasing consumer spending, reducing disposable income, prioritising essentials shopping, and others have had some impact in the retail space. Customer preference has shifted towards indoor attires as work from home culture gains prominence. While the disruptions caused by the pandemic did result in a staggered slowdown during peak times, the offline retail space is again reverberating, which is a positive sign for recovery.
Customers still majorly prefer the tangible experience of physical shopping. Backed by the major vaccination drive and various COVID appropriate measures, such as, physical distancing, sanitisation, promoting cashless transactions, e-bills, etc., there is renewed customer confidence to catch up on missed shopping experience. Cantabil has been able to successfully capitalise upon the changing trends by implementing an agile strategy and evolving with the times. Consequently, despite disruptions in retail space, we have scripted a record sales of July and August registered as highest ever in comparison to corresponding months. Strong business fundamentals, investing in essential, impactful physical presence and seamless shopping experience have all contributed to the growth.
What were the key learnings?
The pandemic has been a testimony that even amidst crisis the essential fundamentals associated with customers don’t change. People still would prefer offline shopping if given a safe and secure environment to shop. While customer centricity was always most important for any fashion apparel brand, health, hygiene and sanitation have become essential aspects, almost a precondition, for offering a positive shopping experience. For us, it has been important to ensure that we give a great shopping ecosystem in all the outlets across India. While the pandemic has also inclined customers on digital space, online shopping space and Omni channel approach does require its due focus. With the socioeconomic fabric that India has, offline shopping will continue being the most important medium of sales, even though online shopping will continue to grow.
The fact that we have witnessed more than expected footfall which has also reflected in our sales figures is a significant indicator of this trend. While we consolidate our market position by adding more stores and covering more geographies, Cantabil is taking strides in upgrading its digital infrastructure. We have endeavoured to further strengthen our omni-channel strategy, making our debut in the e-commerce space with Myntra, Amazon, Flipkart, Ajio, Tata cliq etc. Apart from this, we have also learned the importance of bringing an in-store feel to the whole digital experience. Moreover, we are stepping up the use of technology in order to remain ahead of trends that are bound to run galore once retailers adapt the ‘new normal’.
What are the future plans of Cantabil?
The company keep-on expanding its retail footprint and opening 5-6 stores every month. The Company’s plan in the last 3 years to expand in Tier 2/3 cities and beyond along with tier 1 cities has proven a great success and we will keep on expanding our proven growth story. We are also very hopeful to add one more successful chapter in our newly entrant E-commerce venture as a contributor in our top line to achieve our overall targets to reach 1K crore of Turnover in next 5 years.
Will you continue to focus on Bharat?
Yes, we will be focusing on expansion in tier II, III and IV markets as they have huge potential. In tier III and tier IV the purchasing power of the consumer is slightly limited but our pricing strategy for our products gives the best offers to our customers. We are planning to add our retail footprints in combination of 70% Company owned outlets as well as 30% asset light franchise model.
What are your views on sustainable fashion?
With the growing consciousness towards saving our environment, most brands are trying to shift their image towards sustainability. With increase in awareness and consciousness both from the customer and manufacturer sides, fast fashion is in a passing phase and is being replaced by sustainable fashion. Hence, brands across categories are trying to redesign their offerings in a way that they can be as close to being sustainable as possible. The consumer today, especially, Millennials and Gen Z buyers, are more environment conscious and they are completely shifting their focus towards brands which support such an approach. For this, the fashion industry across the globe is moving towards sustainable ways to thrive in the market. The brands are adopting conscious sustainable practices in a way to not only attract a loyal customer base but also offer their responsibility towards the environment.
Do you think there are any textile reforms needed in the country? If yes. List one.
The recent GST council meeting has proposed a structural change to correct inverted duty structure in ‘footwear” and “textile” industry which may significantly impact the readymade garments as well if basic rate of GST of 5% on garments up to taxable value of Rs. 1K goes upwards as retailers would have a dual challenge i.e. apart from managing future impact of upward tax, the additional burden of subsumed GST on in-house inventory as on as on enforcement date would squeeze the margins. This major impacted issue has to be dealt with accordingly by the authorities.
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