A private label manufacturer, International Direct Group (IDG) caters to the US market for woven bottoms and tops for its core customers, including American Department stores such as Macy’s, Dillard’s, etc. It’s been five years since the company started sourcing from India through Delhi-based buying agents – Montrose – primarily for products that the country is well known for, such as woven shirts, embroideries and other techniques that are unique to India. Speaking exclusively to Apparel Online, the team of Joel Ratner, Executive Vice President of Sales, IDG; Teri Cirruto, Design Director, IDG; and Sameer Thapar, CEO, Montrose Delhi, the buying agents of IDG, talk about India as an important sourcing destination for IDG and share the company’s strategy for the Indian market.
With customer demand evolving and changing by the day, the market is constantly demanding something new and unique to sustain. But, Joel who is not new to the Indian market is of the opinion that there has been little evolution in terms of how business is done in the country and exporters too are not really upgrading themselves. “India is pulled back by its lack of good textiles and innovation in the textile industry. I think that’s the biggest limitation. So buyers like us have to utilize India in what it is good at, in cotton, rayon, etc.; products in these fabrics can be done competitively. It’s a global world; you need to source the strength of each country,” reasons Joel. Though the country is well known globally as a traditional textile base, but what it lacks is innovation, styles and doing things in a new way.
Interestingly, though many companies boast of a product development department for a buyer such as IDG, innovation and not PD is the key to growth in business; and being ahead of competition is what the company aims for. “A lot of PD by companies is just about showing us what everyone else has produced. If I have the same style every season, it doesn’t work; to blend a signature style and present it in a different way every season, doesn’t happen in India. Twice a year I come to India and I find that 95 per cent of the stuff is the same,” claims Joel. Highlighting the quick-fix attitude of many exporters Joel adds, “Typically in India, we will have the same factories, come to our office every year and show us what my competitor shipped last year was. I don’t care; I don’t want to know what the other US companies are shipping… Show me something new.”
Not depending on its vendors to feed new products into the market, the company innovates through its PD department, comprising a group of designers who are well-versed of the global trends. “We go shopping all over the world and look for concepts to develop, based on gut feeling of what will be important for our customers. You have to show new things all the time. We keep on making samples. If for instance some product is doing really well, we do not want to let go of it, but I cannot show the same product again, therefore we keep on updating it. This is also important because once a product is popular, someone else can always do the original product cheaper than me,” believes Teri.
IDG only works with factories that are compliant, whether big or small, by independently conducting their third party inspection, apart from retailers such as Macy’s own audit as well. “Every PO is under third party inspection, which is costly for us but it is worth it as it keeps our quality up to the mark.” – Joel Ratner
For a private label company like IDG, being part of a global business comes with its own set of challenges that includes foremost coping with the ever increasing and changing demands of the customer and also meeting the expectations of retailers. “As the world is global, so is the communication between countries across the globe; the travel time, the understanding of fashion…, everything has been cut down. So I don’t think there is any challenge in accessing to somebody. The key is the right staff and right people to work with and manage everything,” says Joel, adding, “the challenge is more on finding committed factories that can deliver as per expectation.”
This makes it really critical for the company to work with manufacturers, who understand the company’s sensibility apart from having an alert management and compliance systems in place. “We only want to do business with people who are hands on in their business. If we go to a factory and the owner of the factory is not involved, we are not interested. Most of the time critical decisions need to be taken which are time bound, you cannot wait for the hierarchy to fly in, and so we need someone who is hands on. We are little conservative in terms of choosing the right vendor. The people that we deal with are very reliable and generally give us things on time and when someone is not reliable we stop doing business with them,” adds Sameer.
Catering to the mid-market segment, basically departmental stores and having a separate division for high-end business, the company does small lots in many styles from India, around 600 pieces for high-end and an average of 8,000-10,000 pieces per store for mid-market. The lead time offered is a 90 days’ cycle, which is comfortable for the vendors. Though the market globally has been slow in the last few years and a lot of buyers have been impacted by this, IDG has successfully waded through the tide of tough market conditions by offering unique product categories. “Slow retail business has not really impacted us because we always try to offer something new. That’s the speciality of IDG and over the years, the business has only grown for us,” asserts Joel.
In fact, even though Macy’s have their office in India they continue to source from IDG due to their strength in the product category (ladies tops) and its quality. “Different set of buyers see different things. We give Macy’s something that they can’t do on their own. They buy from us for our designs! So we help them to complete their shelves. It’s like a puzzle and we are filling in some pieces of the puzzle,” avers Joel. The company also lays great stress on colour approval and fits through a strong fit team located in the US, as India’s strength doesn’t lie in structured garments. The company’s collection from India is majorly for seasons such as spring, spring/summer and autumn, as Indian market lacks winter fabrics.
Overall, India as a sourcing destination accounts for 15-20 per cent of the business of IDG by offering product categories in women’s wear, like dresses, tops and tunics.
Though the company has noticed the movement of production facilities to the interiors to decrease the cost of production, the company refutes the idea of it being viable for them. “I wouldn’t be interested in a factory that is 300 miles away if my agents and my inspection people cannot get there. Also, skilled labour becomes a challenge, so also does getting other resources. First you need to set that all up which is time-taking and requires handholding,” states Joel. He also points that the Indian market is seeing the next generation coming in who are more exposed and educated and believes that they could make a difference in terms of bringing new things to the table.
Meanwhile, the company is content with its set of vendors and is not really looking for any new ones, though they would be interested in seeing new vendors who bring innovation to the table. The company does understand the strengths and challenges of working with the Indian market and is determined to work exclusively with its agent to tap the country’s strengths such as embroideries through their own product innovation. “Although the Indian market is known for its techniques but it’s the same one that is being seen always. We rarely see any new interpretation. Indian taste sensibility is different than the international requirement and hence India is limited in terms of their design application, failing to match the global demand. Once exporters are able to bridge this gap, India sourcing will reach new heights,” concludes Joel.