Within six months of shutting down its fashion portal Abof, Aditya Birla Fashion announced plans to relaunch Abof as a private label, which market experts state is a way to have better control over margins. Given the fact that online and offline retailers are eyeing more private labels on their shelves, the strategy seems to be very inherent to fashion retailing today. Leading e-commerce players like Myntra, Amazon, etc are pushing private labels on their platforms as heavy levels of discounting become the norm for customer acquisition. The share of private labels has also been continuously growing offline with major retailers like Future Retail, Shoppers Stop, Trent, etc focussing on increasing their private label share. Ajay Srinivasan, director, CRISIL Research, highlights, “Private labels contribute about 10-15% of e-commerce sales in India. For organised bricks-and-mortar, the same stands at around 20% of the sales.” Shoppers Stop, in its 2016-17 annual report, mentions that private brands contributed 12% to its sales in the said period. Meanwhile, the growth of exclusive brand sales was 30.9% from brands/labels such as Wrogn by Virat Kohli and Desigual, the Spanish fast fashion brand. The number stands at around 20-25% for Myntra, state experts, further adding that for an international brand like JC Penny, the private label percentage could be as high as 25-50%.
The pull factor
While celebrity-led private labels in the West have made a mark, in India, it is an increasing trend. So be it Victoria Beckham or Kim Kardashian with their fashion lines, Anushka Sharma with Nush or Rhea and Sonam Kapoor with Rheson, the private label scene is seeing a celeb surge. While in some cases, the celebrity is invested wholly in the fashion line as the co-creator and owner, in some it is limited to having a range inspired by them. Nevertheless, brands like All About You (Deepika Padukone), Prowl (Tiger Shroff), HRX (Hrithik Roshan) and more are seeing resonance in the Indian fashion market. Mojostar CEO Abhishek Verma points out that brands have realised celebrities have a natural pull factor, but some brands do not have a unique proposition beyond it, which is wrong. “Yes, they will get lots of footfalls and traffic, but it does not lead to conversion,” he says. For example, Shraddha Kapoor was associated with Imara earlier as the co-creator, but she has now been replaced by Jacqueline Fernandez as the face of the ethnic fashion line. Sometimes, brands claim a range or two is created/designed by a celebrity but that may not be co-creation. However, the retail market in India is crowded and highly competitive. Given this scenario from a brand’s perspective, the celebrity plays an important role to help draw customers. Afsar Zaidi, co-founder HRX and MD Exceed Entertainment, asserts, “Usually every HRX piece Hrithik (Roshan) is seen in becomes an instant sell-out for us. Also the advocacy that comes with the celebrity wearing his own brand, and feeling stylish and comfortable in it is more authentic than any other paid communication.”
Pawan Agarwal, chairman and MD at Suditi Industries that markets Anushka Sharma-backed Nush adds that celebrity-led brands have assured attention from their fans which leads to faster entry into the market and a faster growth trajectory. “Nush will be selling at over 50 touchpoints this coming season, targeting a 100% growth.” Not so surprisingly, most of these brands including Nush, Wrogn, etc are targeted towards the young consumer aged between 18-35 years. Even the upcoming brand Prowl in association with Tiger Shroff aims to target the youth who lead an active lifestyle. “We see a huge white space as traditional active wear brands are not able to provide products that are apt to this market,” says Verma. Priced between `1,000-3,000 for apparel, Prowl will first launch online, focus on direct distribution and then open offline stores. Similarly, Nush’s sales are also spread across online and offline channels, with plans to increase presence pan-India in locations with high footfall.
Beyond the growth
Mojostar is also in the process of launching two more celebrity brands — one with Jacqueline Fernandez and the other with a Bollywood A-lister. The company believes in roping in the celeb not only as the co-creator but also as the co-owner of the brand to ensure long-term commitment. HRX, reportedly currently worth around Rs 200 crore, aims to be at `400 crore by the end of the next financial year. “The next step is to venture in offline retail with experiential stores and international markets. HRX is available on Myntra currently, which takes care of 70% of the Indian, young, fashion-forward diaspora,” Zaidi adds. It is interesting to note that unlike Indian private labels, international labels invest a lot in creation. Clearly, brands that have an identity and proposition beyond the celebrity, will survive in the future.