Here is a little piece on INDIA and trade. It sounds to me like they need ProNetLink!
Indian Apparel Industry Will Need To Use Net To Operate At "Warp Speed"
By Madanmohan Rao
The Internet is changing the structure and definition of tradeable services worldwide, according to the World Trade Organisation's Report on Electronic Commerce (1998). It predicts that the Net will profoundly transform inter-organisational commerce, retail, and government procurement sectors worldwide.
The ripple-effect of these changes is affecting the sale of items like books, PCs, apparel, tickets and music in advanced Internet economies like the U.S. -- and will soon impact India as well.
Close to $7.8 billion worth of retail goods were sold via the Net in the U.S. in 1998, according to Forrester Research. Deep product selection, easy shipping, and attractive online promotions made items like books and apparel a favourite with Net shoppers.
Leading online service America Online (AOL) reported that the majority of the goods sold in the record-breaking Christmas '98 season (amounting to over $1 billion) consisted of toys, apparel and books.
And it is actually in the business-to-business sector, and not the business-to-consumer sector, that the Net is expected to have its most dramatic impacts as companies hook up Intranets and Extranets to cut costs, improve efficiency, and create whole new marketspaces.
Such trends are becoming visible in the Asian context as well. For instance, the site of trade information publisher AsianSources.com, a business-to-business trade inquiry hub, is facilitating millions of dollars of international trade leads for Asian companies in the manufacturing, pharmaceutical and apparel sectors.
From humble email messaging and real-time market research to online sourcing and e-retailing, the Net has much to offer Indian businesses. Sectors like the apparel industry have only recently begin to sit up and take notice of the potential of e-business for a wide range of activities in apparel design and development, such as online brand building, visual merchandising, and data warehousing.
At a Federation of Indian Chambers of Commerce and Industry (FICCI) meeting in New Delhi in May, apparel designers renewed their determination to acquire industry status while also tackling issues like the use of IT to improve linkages with suppliers, mills, distributors and retailers. Textiles secretary Shyamal Ghosh stressed the need for the Indian apparel industry to leverage IT for global competitive advantage.
The National Apparel Summit and Retail Summit, recently hosted by the National Institute of Fashion Technology in New Delhi, concluded with a panel discussion on opportunities and realities of e-commerce for the apparel industry.
Retailing will undergo tremendous change in India in the next decade, according to Simon Bell, principal consultant for retail practice at A.T. Kearney (India).
One of the key global trends in the retail industry, according to Bell, is the "battle of the formats" between different kinds of outlets: value discounters, specialty stores, small independents, mega-stores, and non-store retailing. In addition to catalogue and tele-shopping, a new but fast growing segment in the non-store category of outlets is the e-retail centre, or Web-based merchandising driven by e-commerce.
Online sales for the U.S. apparel industry amounted to $157 million in 1998, but will shoot up to at least $650 million by year 2001, said Bell.
These trends will soon be replicated in India as well. Bell predicted that by year 2005, more than 20 per cent of the apparel retail turnover in India would be accounted for by organised chains, who will use sophisticated information technology to cut costs, improve market responsiveness and manage customer loyalty programs.
This new trend is best typified by Shoppers' Stop, which has invested heavily in retailing technology such as an ERP system and has also launched a Web site www.shoppersstop.com.
The company is "datamining" integrated customer demographic and psychographic information from multiple offline and online sources to better understand customer buying habits, said B.S. Nagesh, CEO of Shoppers' Stop.
The company gets 10,000 customers a day, at 3 locations in Bombay and Bangalore (with two more planned for Delhi and Jaipur), accounting for 3,000 transactions per day. Merchandise is drawn from over 400 vendors.
"The time for Internet adoption by the apparel industry in India is beginning to come," said Fazle Naqvi, founding member of Indus League Clothing.
In fact, quite a few Indian apparel organisations are already online, with "brochureware" Web sites providing basic information - such as the Indian Apparel Export Promotion Council, Balaji garments, Polo India, Meenaxi sarees, and www.ApparelIndia.com.
Few, however, have invested in continuous, responsive "lifestyle" branding or e-commerce services (such as gift registries) the way other acclaimed U.S. and European sites do, such as Levi's, The Gap, or Banana Republic.
There are hardly any examples of third-party business-to-business sites in India, which could serve as online hubs for strengthening cooperation and information sharing between apparel manufacturers and retailers for mutual growth and business opportunities.
Sites like www.Clothesnet.com and www.FashionWindows.com in the U.S. are superb examples of online business communities geared towards the apparel sector. They feature email newsletters, searchable business inquiry messageboards, and directories of companies offering services like visual merchandising and niche garment design.
E-retailing is moving into the accelerated growth stage in the U.S., but is still at the early development stage in India, said Johnny John, executive director of Reebok India.
Leveraging Net-based technologies will be key for apparel companies and brands wishing to operate at the "warp speed" of the information-age economy, according to John. The Web will allow apparel stores to make more products more accessible to more consumers, he said.
E-commerce in India is very much alive, of course, with sites offering books for sale in Bombay, vegetables in Delhi, and movie tickets in Bangalore. IDC (India) estimates that the value of sales over the Net in India will mushroom to Rs.1,200 crore in year 2001, if the Internet user base takes off.
Sites like Rediff-on-the-Net already have about 20,000 registered users for their e-commerce service which was launched in August 1998, said Arti Dwarkadas, creative director at Rediff Communication.
"90 per cent of our payments occur via credit cards, and 10 per cent via cheques. The average purchase amount is Rs. 600," Dwarkadas said.
Online retailers must ensure smooth logistics, encourage repeat traffic, anticipate consumer needs, offer slick navigation, and build strong online relationships with Internet users, she advised.
"Customer service is also very important. We have a link called Live Customer Service, which directly connects users to customer support staff who are monitoring online transactions 24 hours a day, 7 days a week," Dwarkadas said.
The Indian apparel sector however, faces other challenges in areas like urban landmarket ceilings, lack of industry status, conservative consumer spending habits, neglect of rural markets, lack of confidence from the financial community, and low levels of professionalism.
Besides, the Indian fashion industry is just about a decade old, as compared to more than a century for Western counterparts. And as compared to other emerging economies like Brazil and south-east Asian countries, India is 20 years behind in adoption of large-scale retail models.
Therefore, to better equip the Indian garment industry with nationwide market grasp, the National Council of Advanced Economic Research (NCAER) will take on the apparel industry as a major focus for a future study, said Dr. Rakesh Mohan, director general of NCAER.
Educational institutes like NIFT are stepping up course offerings and internship programs for students in areas like Internet marketing, said Dr. Darlie O'Koshy, chair of NIFT's apparel marketing and merchandising department.
In terms of online assistance, more than a hundred Web solutions companies have sprung up all over India, offering services ranging from basic Web page publishing to international marketing and consulting strategies. Companies like Polaris and NetBase Computing are already working on Web-based solutions for the retail industry.
The drivers for creating an organised, modernised retail sector for Indian apparel will thus be factors like economies of scale, time-to-market, and the use of information technologies like the Internet.
"Retailing in India will soon become a high-tech game, and only the big players will be able to survive," said B.S. Nagesh of Shoppers' Stop. |
