As the world moves forward post-Covid era, with the support of vaccination and improving market conditions, Indian apparel exporters too are improving accordingly. As usual, top-level companies are now doing well and are very hopeful about the coming season. But the majority of small and medium-level companies are still not very happy as orders available with them are just ‘okay’. An important question in this scenario is “What is the new strategy of these SMEs?” What has changed in their working?
It was interesting to know that some of the companies have made interesting investments in technology while few have taken some steps for cost-cutting which earlier was not possible but now is unavoidable. Few have decided to stick to their existing clients who supported them during the lockdown and they have pledged not to work with those who left them in trouble. But, at the same time, there are few companies that are still in ‘wait and watch’ position. It is sad to know that focus on productivity, efficiency is not much in case of small manufacturers.
Not big but fruitful investment
As the current condition is not very conducive for investment but without investing, it is hard to cope with the new challenges companies are investing ‘reasonable’ amount which has immediate and direct return. In fact such investments are the need of the hour.
Jaipur-based export house Cheer Sagar invested in virtual showroom and solar plant recently. Virtual showroom has been advantageous to the company and is now a permanent feature of the leading export house.
“Our clients appreciated our virtual showrooms (separate for Europe as well as Japan) and we benefited through this in a good way. At the same time, the solar plant is also helping us to reduce energy cost,” said Arnav Poddar, Director of the company.
Few of the companies also shared that they have invested in software for product development.
Wherever possible, reduce costing
Though the companies since many years were taking steps to reduce costing or control overhead wherever possible, they are now aggressively working on this front. For example, Mercury India Exports having unit in Noida on rent, shifted to Delhi in its own premises to save rent.
Shoaib Malik, Director of the company told, “We started operation in Noida a few years back as we had plans to operate a big and organised unit but looking at the challenges post-Covid, we have decided to manage in our Delhi unit. Though minimum wage is higher in Delhi compared to Noida, we still have the benefit of not paying rent.”
There are many more such examples where not only SMEs but also big companies have shifted their units or combined the units. Earlier due to strong social distancing, combining of units was not viable but now with necessary changes in layout and allied aspects, units are saving the costing by utilising less land or buildings.
Mercury India Exports has even altered its strategy regarding product offerings. The company was earlier mainly into very high-end products only but now it is mainly focused on basic products.
Not working with ‘all’ buyers
On the condition of not disclosing names, few apparel exporters told Apparel Resources that they have refused to work with such buyers who have ‘betrayed’ them during the lockdown. It was also insisted that consolidated business is much better than working on risk.
Still wait and watch
Irrespective of various above-mentioned initiatives, there are many small-level exporters who have not gone for any transformation or have not taken any major steps as they are still following a wait and watch strategy. Some of them believe that any initiative or strategy will not pay them until things don’t become as they used to be in the pre-Covid era.
“We are getting some business from our old customers and few of them have increased price also as they (buyers) are familiar with the ground realities of increased cost. Our major concern is to get new buyers as earlier; through physical shows, we used to get one or two new buyers in every event. We have invested in virtual events but now as overall situation is improving, hopefully, we will again get new buyers through the upcoming event,” said Pradeep Nahata, MD, Karni Exports, Jaipur.
One thing commonly found in discussion with all the apparel manufacturers is that most of them are hopeful that soon things will improve and they will have good business in the next few months.
Moving beyond PPE and mask manufacturing, few of the apparel exporters are focusing on medical textiles product range also. As these are kind of complicated products and need a high level of compliance, few companies have started manufacturing antiviral jackets and joggers. Genus Apparels, Faridabad is now offering such products which can be used at office, while travelling as well as during outdoors. Its multipurpose jacket is washable 50 times and is a very comfortable fit for daily use.