Store openings are usually glamourous affairs, when a select group of invitees indulge in wine and cheese as the evening unfolds. The commerce begins in earnest later, with hopefully a good dose of publicity and ads, ensure sales pick up in three months. Contrast that to fast fashion giant Zara?s entry at Delhi?s Select Citywalk last weekend, when hordes of people tried to gatecrash the opening. If the long lines at the sales counters from the next day are any indication, the store should be opening more sales counters soon. This when Zara doesn?t even advertise.
?We view our entry into the Indian market to be of significant strategic importance,? says Jes?s Echevarr?a Hern?ndez, chief communication officer of Inditex Group, adding, ?Our retail offering has been very well received by shoppers in other Asian markets, and we have rapidly expanded there. Now India will be one of our top priorities in the region. We consider that our entry in the market has been taken in the most appropriate moment.? The Spanish economy is not in the best of shapes, and about half of Zara?s stores are in Spain alone. The Inditex Group, owned by Amancio Ortega, finally made its much awaited launch in India through its most recognisable brand. Inditex and the Tata Group have a joint venture to develop Zara stores in India. Inditex controls 51% of the venture, while Tata Group?s Trent Ltd controls the remaining 49%.
Zara has commercial presence in 77 countries and its expansion plans are focused on Asia and Europe, says Hern?ndez. The group has seen rapid expansion in the past two decades and its entry into India had been long anticipated by the Indian customer. ?As many as 40% of new Inditex openings during this fiscal will be in this (Asia) region. This means that one of the main focus for our designers are Indian customers,? he says.
Zara, once described as among the ?most devastating retailers in the world? will continue its global practice of retailing only through its own stores. The Inditex Group has over 4,600 shops globally, of which Zara alone accounts for over 1,400 stores. Besides Zara Kids and Zara Home, other brands in the group include Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Uterque. China already has 78 Zara stores, 41 of which opened last year. ?When Inditex Group enters a new market, it never has a concrete objective related to a number of new openings or financial figures,? demurs Hern?ndez about the exact expansion plans in the country. Experts estimate that it is expected to go on a rapid expansion spree once it is sure of market competition in this category. Pablo Isla, Inditex chief executive, had earlier in the year indicated that India would be an ?important? market for the brand in the medium term, recognising at the same time the peculiarities of the Indian market sensibilities, including high duties, retail challenges and unique fashion trends, which have made it difficult for many global apparel brands to succeed here.
Hern?ndez says, ?India has relevant cities with a high population that can have Zara stores if we find very good premises there. We always wait until obtaining the best premises for our stores and now we have them in India. It is a matter of finding the store location and store environment that the Zara customer deserves.?
Hern?ndez says Inditex always tries to adapt the prices to different markets to offer attractive prices to its customers. Prices at the Zara store in Delhi range from Rs 990 to Rs 8,990, which has the customers excited. ?Zara customers around the world look for an appealing mix of trendy design, good quality and attractive prices. We are very satisfied with the warmth of the Indian public after our first opening in the country,? says Hern?ndez. ?We are still in the initial days of our commercial activity in India and have time to learn the tastes and needs of our Indian customers and try to cater to their demand in the best possible ways.? Given that the first store, divided broadly for men and women, is a huge 1,800 square metres, the brand clearly is making a big push to lure in the premium customer.
The Zara model
The Zara model is based on a system of constant renewal. As it owns most of the steps in the journey, including designing, production and retail, it has become known for the fast inventory churn. The success of La Coruna-headquartered Zara lies in the ability to recognise and assimilate the continual changes in fashion and constantly designing new models that respond to costumer desires, explains Hern?ndez. He says the availability of the factories owned by the company, together with a wide range of highly experienced external suppliers who have a solid commercial relationship with the group, allows Zara to manufacture a model and to have it for sale in its stores worldwide within the average term of approximately two weeks. Clothes are dispatched twice a week, and this frequency allows a continual renewal of the fashion trends on offer.