Past the learning curve

Past the learning curve

When one thinks of semi-formal attire, one brand comes to mind a tad faster than the rest – Indian Terrain. Over time, the brand has nurtured this category and engaged its target audience in the age band of 28 to 40 years through a constant process of updation. In fiscal 2011, Indian Terrain is all set to reach its revenue target of Rs. 120 crore and is getting ready for the next level of growth. Its immediate plans include opening 30 more exclusive outlets and 10 shop-in-shops inside retail store, Westside, across India.

Pitching the idea

Indian Terrain was first conceived in the year 2000 by Venkatesh Rajgopal, who is currently the managing director of the company. By virtue of his own experience in the export garments sector through Celebrity Fashions Ltd., Rajgopal possessed critical knowledge of the garment business and worldwide trends in fashion apparel. “The one aspect that always stood out for me was the extra lengths to which a foreign client would go to, in order to ensure quality and delivery of what their brand promised,” says Rajgopal. When Indian Terrain was set up in 2000, the aspiring Indian middle-class held buying potential and lifestyle choices were influenced by exposure to the west. And this is when Rajgopal realised that there was a definite market for western wear in India.

With an initial investment of about Rs. 30 crore and a working capital of another Rs. 20 crore, Rajgopal and his team established an Indian apparel brand that would be defined by quality and style, inspired by sportswear and semi-formal attire worn in the west. The initial years were not Indian Terrain’s best, with focus being on delivery of the product to retailers as against building a brand and establishing itself in the marketplace. However, the setting up of its first exclusive retail store in Alwarpet, Chennai and trading equity for media space with Bennett, Coleman & Co. Ltd, the parent company of Times of India, proved to be two very strategic moves.

Experimenting with communication

Rajgopal holds on to his sense of humour while describing the experimental advertising Indian Terrain indulged in. One such idea on Indian Terrain’s learning curve was its first advertising campaign, which focused on the global Indian, but fell flat and did not hit the mark of representing Indian Terrain as a brand that spelled aspiration. A venture into the world of television commercials also proved to be a bad move, as the company simply did not have the required budget to advertise on the medium. Lessons were learnt and with Kunal Kapoor coming on board as brand ambassador, it became evident to the team as to what works in the Indian market and what does not.

The brand has never been comfortable with stagnation. It has always tried to evolve new strategies and one such was its foray into the women’s apparel market. Rajgopal points out that this move did not prove wise despite getting an expert to help conceptualise the line. He attributes the failure of the women’s line to cultural factors that were not factored in. Noting the positives, Rajgopal says one move that did help define the brand was its tag line, which simply states ‘Just be’. The thinking behind it was that every individual already had his or her own dreams and the brand should just be a part of these aspirations.

Step by step

Rajgopal is convinced that one of the brand’s strengths is its ability to control quality as it manufactures nearly all of its products.  To add to that is the elaborate conceptualisation, manufacturing, marketing and trading process that Indian Terrain undertakes for every new line that hits the stores.

It all begins ten months before a collection can hit the stands and the first step in the process is a retail visit to markets such as Tokyo, New York and London to spot the emerging trends in global fashion. The ideation process that follows includes adopting these trends, designing the garments and choosing fabrics. Rajgopal adds, “This is the stage at which marketing chimes in with their brief and tells the entire team what did well in the past season and what did not. Here the design team represents ‘magic’ while the marketing team denotes ‘logic’. These two visions must match for Indian Terrain to make money.” All this culminates in a 14 day ‘road show’, where buyers from all over the country come to check out the products and place their orders as per their requirement. This is also a time of absorbing the opinions of both small format and large format retailers, enabling them to get an idea of what will fare well pan-India. Post this, the team has about 100 days to order the fabric, manufacture and deliver to stores across the nation.

The challenges in the process are aplenty. But, the one that stands out is sourcing the material required to manufacture the 6,00,000 to 7,00,000 units of apparel. Material is sourced from India, China and even Turkey and Rajgopal asserts that the supply chain required for the manufacturing process is something India is lacking in. Another aspect to this is that sometimes, it is almost impossible to source materials from places like China, as the requirement may be comparatively small. Overall, Indian Terrain’s constant growth is evidence that these challenges are being fought and its goal of delivering a quality product is being met, season after season.

Currently, Indian Terrain’s sales figures are highest in the west of India, followed by the south, the north and then the east. With apparel priced between Rs. 799 and Rs. 1,899, Indian Terrain’s offering is affordable to the rising middle-class. Keeping several factors in mind, Rajgopal is confident about robust growth, going forward. The New Vernon Private Equity backed company that demerged out of its parent company, Celebrity Fashions, recently listed in the markets and is trading at Rs. 83.5 with a market cap of around Rs 46.63 crore (as of 12th March 2011).

Rajgopal further states that while Indian Terrain currently (as of December 2010) taps into about 30 per cent of Celebrity Fashions’ manufacturing prowess, the brand’s growth rate will see that number will rise soon. There has also been a change in the face of the brand with Abhay Deol signing up as the current ambassador of Indian Terrain. The brand’s future plans include a foray into accessories and expansion of the business through more store openings. For Indian terrain, it does seem like the time is right here, right now.