Manish Mandhana, CEO of Mandhana Retail Ventures and Being Human Clothing knows that his biggest marketable asset is Salman Khan. His is the face that has literally launched a thousand brands. And since Being Human Clothing is an extension of his overarching Being Human Foundation, customers resonate to it strongly.
Manish explains that while they leverage this celeb power to attract buyers to their online and offline platforms, they are committed to growing the brand in other ways too. This is by offering apparel that are in sync with contemporary trends, are value for money, easily accessible in stores that are uniquely designed – while remaining efficient by outsourcing processes like manufacturing to trusted vendors.
Here are excerpts from his interview:
What are some major business disrupters in the apparel business?
Lots of changes have taken place in the past couple of years and there is a complete change in the customer’s mindset. One major disrupter has been the online business. In the past two years, online players like Myntra, Jabong, Flipkart, etc, have become very aggressive and consumers have become addicted to online shopping because they find good deals.
So obviously it has become extremely competitive as too many brands are available on the online platform. There is a clear comparison of pricing, and while the brand aspiration remains, consumers have a lot more choice now.
How is Being Human Clothing adapting to these changing business situations?
It’s a world of deals and offers and we have to accept this reality. We have to focus more on offering value to customers. Hence, we have embraced technology in a big way and as a brand, have started our own online store. Apart from that, our focus will remain on tier 2 and 3 towns, which are the new growth centers in the country. We have to be more watchful about trends and relook at how we can consolidate our business.
These cities have also seen the proliferation of many global brands. How are you dealing with competition from these players?
The global players who have set up shops in these regions are cannibalizing the business in some way. These international giants, be it H&M, Forever 21 or Zara are growing aggressively as they have the capacity to invest without making profits, since India is a one of the countries in their world market. So they are willing to be patient and even sustain losses.
Can independent retailers play by the same rules, i.e. sustain losses to stay in the game?
It is difficult for independent brands to sustain the business itself. Today, consumers walk into big format stores, which is what the above mentioned brands offer or even a FBB, which gives value in the mass market, albeit in a bigger format. Then there is Max, which is well priced, and Westside, which though it is projected as a premium brand, has good quality products with great pricing. On the other hand, you have Reliance Trends, which is entering the smallest Indian towns since it has the bandwidth, and wide product offering.
So, the retail market has become very crowded. One has to be very careful and strategize the business looking at various competitive factors, including pricing, design or regularity of new merchandise coming into the stores. It’s time to focus on these areas.
Are there any particular geographies that you are focusing on?
Northeast is a new growth area, since we’ve got enough presence in west, north and even south. This area is a heavily youth-centric and fashion driven market, which suits our brand.
So, we’ve ensured that we open more stores there. In fact, we are opening our second store in Bhubaneshwar, after opening the first one six months ago. We are also opening a store in Shimla.
On one hand, there is the growing competition in offline business. On the other, a similar scenario is playing out in the online space. How can retail brand ensure that they don’t one line of business cannibalizes the other?
What we have done is that we especially manufacture products for the online channels, so that it does not affect our brick-and-mortar stores. The good part is that lots of intelligent data comes in from online about the product categories that are in demand, the sweet spot for price points, the kind of designs selling most during a particular period, etc. So we can curate our business based on the demand and supply accordingly, rather than having a fixed offering. Of course, it means that we have to study the market to understand what it is required and then cater to it subsequently.
At the same time, how are you encouraging customers to visit your offline stores more regularly?
Today, shopping is about bringing more convenience to the consumer, faster, and with good service and best deals. If a shopper wants to buy a particular product, they can visit our portal, see the latest collections and choose to either collect it from the physical store or have it delivered to them.
We have started this click-and-collect concept since October in Mumbai and some cities in Gujarat and are slowly planning to take it to other parts of the country. We are happy with this initiative’s results, as it already contributing 2% to our top line every month. The good part about the online is that it doesn’t have the capital expenditure associated with offline business, like rental costs, investment in furniture and fixture or manpower.
Being Human Clothing has a highly popular celebrity as its face. How has this helped it generating actual sales?
We are extremely lucky that we are a brand that is led by a celebrity with a huge fan following. If we don’t leverage that, we could be making a big mistake. So, we obviously use this to our brand’s advantage to increase our followers on social media platforms and pass on information about the brand. We also try to create a loyal customer base on these platforms and then convert that into business.
At the same time, we realized that to survive in the brick-and-mortar format, we have to make the stores an exciting space, by innovating to attract customers. Luckily, we have the opportunity to do this, since the Being Human brand talks about social goodness and charitable causes and we have a celebrity who has a huge fan following.
So we engage our consumers by involving them in different interactive activities that the stands for. We want Being Human to be a sexy looking place. So, when the business gets tough and customers go online, one needs to make the store more good looking.
Store designs have to evolve every few years as customers seek freshness in a brand. So, we designed our outlets smartly to make it more product-centric. Also, we were getting a little too elegant with our store designs. Considering that the cost kept escalating annually, if we could bring your capex down, it would help our bottom lines. So, we created a new design across five stores, which people loved. We are now going to carry this design concept forward.
How are your manufacturing units synced to stay in tune with the latest trends?
We don’t manufacture anything; everything is outsourced to some of the best factories. And we have various options in each category to choose from. Each vendor has some specialty and our job is to capitalize on that strength. So we don’t put all our eggs in one basket, and have lots of vendors in each category to give us a variety of products.
What is your current footprint?
We have 25 franchisees, and we are growing this number. The ROI period is at least three years on the franchisee’s investment, which is very good.
Besides India, we are present throughout Middle East through our partner, the Landmark Group, who have stores in about 10 GCC countries. We also have presence in Europe, Nepal, Mauritius and Fiji. Recently, we also did some tests launches in Canada, which was successful and are planning to grow our reach to other countries.
Have you set any growth targets for Being Human Clothing?
Currently, around 15% of our business comes from exports. In these tough market conditions, we will be happy if we continue to get between 10% to 15% growth for the next 10 years.
What challenges do you foresee in achieving this?
There is over supply of apparel worldwide. Earlier, the life of clothing used to be longer; now people wear it for around five times and then want newer themes. Also, they don’t want to pay too much to buy clothing, since they wear it for only limited period.
Luckily, while this is a challenging task, clothing will a necessity and not a luxury. So there will always be demand for it. Hence, one has to create smart fashion, which is cost-effective with appealing designs. As a brand owner, you have to also focus on become more cost efficient by sourcing operations smartly.