MUMBAI — Two innerwear brands have stepped into the stand-alone retail space in India, bringing both variety and new concepts to the premium segment of the $4 billion market.
Dutch brand Hunkemöller has opened two stores since December, launching in India with Reliance Brands Ltd., a subsidiary of conglomerate Reliance Ltd. Reliance had annual revenues of $3.8 billion in the year ending March 31, 2015.
Hunkemöller has an exclusive long-term franchise agreement with Reliance Brands, which has partnered with more than a dozen international companies including Ermenegildo Zegna, Diesel, Gas, Juicy Couture, Steve Madden, Superdry, Dune and Paul & Shark.
Both Hunkemöller stores are in the larger New Delhi area, with two more expected to open by April.
“We’ve gone back to every hypothesis we made for the brand before it launched and changed and grown the plan after seeing the way the market is responding. Instead of four stores for 2016, we now plan to open 10 stores this year,” said Darshan Mehta, president and chief executive officer of Reliance Brands.
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“This category behaves very differently than other fashion brands,” Mehta explained. “The pure window-shoppers are much smaller, with a higher conversion rate [from footfall to sales], at 18 to 20 percent compared to 10 percent for fashion. The typical basket size is bigger, too – at around 3 [items] as against 1.8 to 2 for fashion brands.”
The Dutch innerwear brand has more than 700 stores in 19 countries, with a strong market base in Europe and in other countries including Bahrain, Egypt, Morocco, Aruba, Curacao, Oman, Saudi Arabia and United Arab Emirates.
The innerwear market in India has been growing at more than 20 percent a year but companies have largely focused on department stores or smaller multibrand shops, with the mass market making up the biggest share of the pie.
Describing the premium innerwear market as essentially a “two-brand market” at this time, with the U.K.’s Marks & Spencer and Canadian brand La Senza as the leading players, Mehta believes that customers are more than ready to experiment. Hunkemöller’s price positioning is 10 percent less than Marks & Spencer and 20 percent higher than La Senza.
“Special-occasion purchases are quite high, for example,” he said. “We thought the more sensuous product market would be approximately 2 percent to 3 percent of the total, but it’s closer to 8 percent.”
Another new entry is Sri Lankan brand Amanté, which has been selling in India for the last decade via multibrand retailers and is now available in more than 1,000 doors. The brand recently opened its first stand-alone store in Mumbai, drawing in the power of Bollywood with the store being inaugurated by actress Esha Gupta.
“We’re starting a whole new journey with the launch of the first stand-alone store. We see this as an inflection point for Amanté and MAS brands to accelerate and make sure we have a dominant share in the market. From this point on we are only going to accelerate,” Vivek Mehta, ceo of MAS Brands India, said. “We have grown at more than 50 percent year-on-year in India, and have planned for a change of strategy to capitalize on this growth further.
“The reason for setting these up now is that we’ve seen a pretty dramatic shift in the way a woman shops in India, as well as the preference she has in this category. Earlier, it used to be a guarded and secret purchase where she wouldn’t want to tell anybody that she is shopping for intimate wear and didn’t want to be seen shopping. Now women are very comfortable shopping from a large format store, where there is an open display. You know, in New York a woman is not afraid to walk around carrying a Victoria’s Secret bag — in India we’re just seeing some initial indicators that this kind of change is happening. Consumer preference and behavior are in the process of a transformation,” he said.
Launched in India in 2007, Amanté is a label created specifically for the market by MAS Brands, a subsidiary of Sri Lanka-based MAS Holdings. While the parent company, which had a turnover of more than $2 billion in 2015, manufactures for global brands such as Victoria’s Secret, H&M, Calvin Klein, Spanx, Oysho, and Athleta, MAS Brands aims to accelerate the growth of Amanté. MAS Holding is considered one of the biggest employers in Sri Lanka with 75,000 workers and has four global design and development hubs in New York, Hong Kong, London and Sri Lanka.
MAS Brands had a turnover of 1 billion rupees, or $14.71 million at current exchange, in 2015, and is targeting sales of 10 billion rupees, or $147 million, by 2020, with plans for Amanté to expand into other Asian countries.
As the innerwear market grows in India, so does the market for sleepwear and activewear and Mehta said the company is adding more to each of these categories, emphasizing that timing was key to the additional growth.
“We still feel that we have two to three years before the international brands really make a full-fledged play in India. We don’t have Victoria’s Secret, so we have these years to capture the mind-share and attention of the Indian consumer,” he observed.