According to a survey report on global luxury brands published by Nielsen in April 2008, India ranks third on the list of luxury shoppers, after Greece and Hong Kong. That statistic is very telling of the change in the mindset of the Indian consumer. And it is this attitudinal change towards high end retail brands that brought about the existence of a fashion conglomerate like Genesis Colors (Genesis).
Established in 2001, New Delhi-based Genesis took under its wings a slew of Indian designer labels such as Satya Paul, Deepika Gehani, Samsaara, Shobhaa De and Bwitch. Genesis undertakes the production, distribution and marketing for several of its Indian brands. “At the time that we set up Genesis, there were individual designers who developed and marketed their lines, at best,” says Jyoti Narula, co-founder and managing director, Genesis. Narula and the other founders, Sanjay Kapoor and Puneet Nanda, sensed a need gap and went on to create a company that integrated resources from the Indian fashion industry, in the most efficient manner. Narula feels that there are several advantages to this synergy, such as a common talent pool and economies of scale.
In 2008, Genesis went a step further and brought to India, several international retail brands such as Kenzo, Just Cavalli, Paul Smith and Jimmy Choo amongst others. As for its international brands, Genesis has little input in the production and only undertakes distribution and marketing within India. “While choosing brands, we draw from experience more than market research,” says Narula. He adds that Genesis picks brands that the Indian consumer can identify with and those that enjoy high recall with its target audience. This was one of the prime reasons for Genesis to pick a 49 per cent stake in a joint venture (JV) with luxury retailer, Burberry from U.K. The deal was inked in 2009 and plans are in place to open stores in India.
Caring for a multitude
“While the thought process is common, building brands is like raising children – each child is different and must be treated individually,” explains Narula. And this reflects in the way each brand functions within Genesis. Satya Paul’s lines are conceptualised, designed and produced by Genesis whereas their lingerie brand, Bwitch, is designed by Genesis, but, the production is outsourced.
When planning the marketing activities for their various brands, Genesis makes use of in-house expertise for their Indian brands. As for their international brands, Genesis is given a creative brief which is in keeping with the label’s international campaign. Amongst the media vehicles used, print remains a primary medium for advertising. “We choose publications that are best suited for each brand,” says Narula.
Finding an audience
Although Genesis has a modus operandi for each of its brands, its success is rather dependent on the increasing purchasing power of young India. “These days freshers in the job market also save up to make a purchase at a branded store. It is all about looking good,” says Narula. He is confident that an Indian audience is capable of picking and choosing the right brand. When asked if the prices levied on designer brands deter consumers, Narula is quick to respond in the negative. “There is this perception that designer brands are expensive when in reality there are several well-priced options,” he says. “By educating the consumer about comparable prices, we can get rid of that initial hesitation to walk in to a branded store,” adds Narula. And consumer responses have been very encouraging, prompting Genesis to widen its focus to Tier II cities in India. “The aspiration amongst consumers in these cities is often underestimated. The growing demand for branded products warrants a presence in cities such as Varodara and Ahmedabad where there are huge dividends to be earned,” says Narula. The same confidence in the consumer is reflected in the JV with Burberry as stores will be opened across Tier I and Tier II cities.
Genesis takes pride in its upkeep of quality, but, things have not always been smooth sailing. Narula accepts that there were issues with judging the quality of tailoring or weaving and the initial results were mixed. “As our operations progressed, we became smarter with imposing quality checks and judging for ourselves instead of taking people’s word for it,” says Narula. He also adds that figuring out logistics was a critical part of the venture. As expansion got underway, there was a need to implement systems that would allow optimum management of the various stores. Genesis currently uses an enterprise resource planning software, Microsoft Navision, which provides them a great degree of organisation within the establishment.
Founders: Sanjay Kapoor, Puneet Nanda, Jyoti Narula
Industry: Retail – Apparel and accessories Genesis enjoys a head start as there is no direct competition from other fashion conglomerates in India
City – New Delhi
Finance, however, came easier. “As ex-bankers, we knew how to speak the language that investors understood,” says Narula. “We have also been tremendously fortunate to enjoy goodwill that allowed us to procure finance,” he adds. Genesis was successful in raising Rs. 110 crore from three private equity investors––Sequoia Capital Fund, Mayfield Fund and Silicon Valley Bank. In 2009, Genesis also sold a minority stake to private equity fund Henderson Equity Partners to the tune of Rs. 80 crore. The sale proceeds were slated to fund future expansion plans.
Speaking of the future, Narula says Genesis is always on the lookout for brands that are a right fit. Plans also include boosting home grown brands while increasing consumer exposure to international brands. While choosing not to divulge figures, Narula states that he is very bullish about the venture’s growth prospects. With some of its home grown brands enjoying a year-on-year growth of over 100 per cent, he has every reason to be optimistic about the future of Genesis Colors.