Sunil Pathare says that while consumers are brand loyal in their category, the younger generation (Gen Z) are more experiment-driven in nature
Emphasising that the demand for premium products is also coming from the tier-two and three cities, Sunil Pathare, the Managing Director of VIP Clothing has highlighted the trend of premiumisation is happening across the board and moving beyond metros.
In an interview with BW Retail, Pathare pointed out that as the company is doing exports to Middle East market, they are looking forward to African belt as well. While consumers are brand loyal, Pathare noted that the younger generation (Gen Z) are more experiment-driven in nature. Edited Excerpts:
Is premiumisation still urban centric or has it moved to the non-metros as well?
I would say premiumisation is happening across the board. It is not just the urban metros where the premiumisation is required, but I think tier two and tier three is also falling in line. There is a premiumisation demand coming from tier two and tier three city also. In our portfolio, we have Frenchie X as a premium portfolio, in which we have used the better fabrics like modal, tencel.
In premiumisation, the fabrics are different. You have to operate those fabrics, the style of packaging, the appearance, the styling, everything is different and it is happening across the board.
Can you elaborate a bit on the sales breakup of the company across different channels?
Currently, from the company’s point of view, 70 to 75 per cent comes from the traditional distribution network channels, with over 450 distributors across the country. Around 15 per cent comes from our modern trade channel. 7 to 8 per cent comes from institutional sales CSD for the navy, CPC for police forces). Rest is exports what we do to the Middle East market.
From the exports perspective, are there any new markets that you are looking at?
Currently, we are doing exports to Middle East market and going forward, we are looking forward to African belt where the brand was earlier also, Nigeria, Ghana. We have seen a good response. We are not doing any white labels, we are doing our own brand and we have seen good response for our brand, acceptance in these countries as well. After the currency fall in these countries, we are looking for good partners in the African nation.
You recently introduced the Yuva series in south India to enhance your footprint. What was the basic idea behind the particular move and what exactly are you trying to tap through this?
When we say Yuva series, which we had started launching in Southern India and you have to go and look at the parts, we are doing a very focused, we are launching each and every category what we are doing. VIP is very well known for its VIP bonus vest, which is a category leader when it comes to the vest category in the country. The idea is to connect, as VIP is known by half of the country.
The whole idea of Yuva series is making the brand younger and relevant to the today’s generation. We are seeing a good response in our Yuva Series, launched in Southern India market and it is reaching to the younger crowd through the choices, what they want.
Athleisure as a category is growing rapidly in the country. What is the update from the company’s perspective?
Post Covid, the athleisure category has been continuously growing. I think hosiery companies are backing up with this kind of category. So we also had come up with VIP range wherein we had launched athleisure the as a category. We had started with t-shirts, track pants and the other parts.
We have seen a good demand to be backed up in this category because there is a huge demand to be seen in this category. The companies are already into the plans of having a full-fledged athleisure range and casual wear range.
Are Indian consumers becoming more brand loyal or more experiment-driven today, given that they are price conscious?
I would say that in our category, they are more brand loyal than the outerwear category. To back this answer, I would say that if you go in men’s or women’s wardrobe, in outerwear, you will find many brands in their wardrobe. But when it comes to undergarments, you will not find that much change.
There is a loyalty based customer who are quite loyal to the brand. We do have loyal customers who are there with VIP for 50 years of their existence. Yes, there is a new generation breed which is the Gen Z, which is more experimental. And for them, there is a different strategy needs to be worked out and how to target them, how to market them is a challenge with the company which to be looked at. We already are into that game with ecommerce platforms.
Since you have been in business for quite some time now, what is that one aspect that most people get it wrong when it comes to cracking the code in this particular business?
Oh, you want to know the secret of the business. I would say every company has the DNA to work on. Every company has a different DNA to catch up. Our company’s DNA has been to create an innovative product. Whenever we launch a product, there is a research being done to absorb the material, the product, our technology which comes into the game.
While ecommerce is growing rapidly, the demand outside of top cities have not been that encouraging. So, what are you doing to enhance the footprint in these areas on offline basis?
We are also seeing that tier two cities also getting demand from these places. The dark stores are reaching the remote areas also. Whether it is zepto, instamart and blinkit or others, they are reaching into the remote areas. Of course, it is a logistics thing. It is not that only metro or tier one cities are getting the demand, it is coming from surrounding areas as well. If it is Hyderabad it is also coming from the surrounding areas of Hyderabad or if it is Bangalore it is coming from the outskirts of Bangalore also.
