Long haul ahead for Victoria’s Secret in India | The Financial Express

Long haul ahead for Victoria’s Secret in India

First physical store opened in Mumbai a week ago

Long haul ahead for Victoria’s Secret in India
The online female innerwear market will be around $1-1.2 billion by 2025: A rise of nearly six times from 2020.

By Alokananda Chakraborty

Victoria’s Secret (VS) opened its first physical store – if you discount the pop-up store at Delhi airport that opened in 2014 and shut down in 2015 – in Mumbai’s Phoenix Palladium mall a week ago under a franchisee agreement with Dubai-based fashion and lifestyle retail conglomerate Apparel Group.

But the India expansion is unlikely to be a cakewalk. An overwhelming 60% of the $6-billion women’s inner wear market in India is unorganised with a plethora of regional brands vying for attention.

The store launch followed the US-based company’s digital debut in the country last year. “The growth of beauty e-store seems to be really good and the store is doing much more than expected,” says Tushar Ved, president, Apparel Group. “Through the online channel, we are able to penetrate into tier one, two and three cities, and are able to reach the consumers where they are based.”

Two more stores – in Delhi by this year end and Bengaluru next year – are in the pipeline. “Our plan is to open 8-10 exclusive retail stores in the next three to five years. Apart from this, once there is enough offline retail presence for the VS’ flagship intimate wear, we will launch the category online too,” adds Ved.

The Mumbai store features the US retailer’s complete range across its three brands – Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty – and stocks everything from intimate wear, athleisure, fragrances and body care. It will also offer the newly-launched Bare Eau de Parfum, which is made with upcycled materials and responsibly sourced ingredients.

The Mumbai store launch comes about exactly a year after the Columbus-based retailer’s parent L Brands split into two companies — Victoria’s Secret and Bath & Body Works – to focus better. That split followed a steady drop in its global sales – from its peak of $7.78 billion in 2016 to a low of $5.41 billion in 2020. Sales picked up in 2021, touching $6.79 billion.

That was also the time VS kicked off a transformation process, trying to shift from a brand associated with the male gaze to a company representing female empowerment. It also started promoting online shopping and sharpening focus on markets outside the US.

Stepping into India fits into this plan. Today, VS operates 1,350 retail locations worldwide and its digital sales contribute upwards of 40% to its overall sales, compared to 24% in 2018. Last year, Indian-born actor Priyanka Chopra joined football star Megan Rapinoe and five other women as the face of VS, emphasising that change to its image.

The branded market in India has two clear segments, depending on the preferred sales channel – brands such as Enamor and Triumph are largely offline-focused, while players such as Clovia and Zivame are digital-first omni-channel.

Interestingly, buyers in the country still patronise offline stores. Various surveys show many traditional shoppers continue to gather information on products and features online, but still make the purchase onsite in a traditional setting by visiting a store.

The prices of VS products themselves can seem prohibitive. VS’ innerwear products start from 1,199 and go up to5,000 a piece only for intimate wear. Compare that to high-end retailer Marks & Spencer’s whose innerwear products retail at half that price. That makes it a contender in the premium segment, which is a minuscule 10% of the branded market.

On the other hand, the opportunity is immense. The innerwear market for women in India is set to double to $11-12 billion by 2025 as incomes rise, more young women join the workforce and people become aware of better brands, said a report by consulting firm RedSeer said.

VS sees itself more in the area of fashion retailing. “Nine percent of the total domestic fashion retail is devoted to branded innerwears,” says Ved.

A Redseer report said that the growth of the female innerwear market in Tier II+ cities is significant and is estimated to be 1.5x that of the metro cities. “Overall, online purchase sentiment has increased by 5-10% across categories, which means that direct-to-consumer brands have a significant opportunity going forward,” Anil Kumar, co-founder and chief executive officer of RedSeer, had said at the time of launching the report.

The online female innerwear market will be around $1-1.2 billion by 2025: A rise of nearly six times from 2020.

No wonder Ved is upbeat: “India is a diverse market that gives great opportunity for every brand to grow in its sector. VS entered India with the beauty category and within some time the company saw the demand for it.”

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