Introduction

The Indian textiles industry is extremely varied, with a hand-spun and

hand-woven sector at one end of the spectrum, and the capital intensive
sophisticated mill sector at the other. Indias textiles sector is one of the
largest contributing sectors of Indias exports contributing about 11 per
cent to the countrys total exports. The industry realised export earnings
worth US$ 41.57 billion in 2013-14. The Indian Textile Industry contributes
approximately 5 per cent to GDP, and 14 per cent to overall Index of
Industrial Production (IIP).
India is the world's second largest producer of textiles and garments and
accounts for 63 per cent of the market share of textiles and garments. In
addition, India accounts for about 14 per cent of the world's production of
textile fibres and yarns (largest producer of jute, second largest producer
of silk and cotton; and third largest in cellulosic fibre).
The textile industry has two broad segments, namely handloom,
handicrafts, sericulture, power looms in the unorganised sector and
spinning, apparel, garmenting, made ups in the organised sector.

Market Size
The Indian textiles industry, currently estimated at around US $108 billion,
is expected to reach US $ 141 billion by 2021. The industry is the second
largest employer after agriculture, providing direct employment to over 45
million and 60 million people indirectly.
The Indian textile industry has the potential to grow five-fold over the next
ten years to touch US$ 500 billion mark on the back of growing demand
for polyester fabric, according to a study by Wazir Advisors and PCI
Xylenes and Polyester. The US$ 500 billion market figure consists of
domestic sales of US$ 315 billion and exports of US$ 185 billion. Apparel
exports from India have registered a growth of 17.6 per cent in the period
AprilSeptember 2014 over the same period in the previous financial
year.
The close linkage of the Industry to agriculture and the ancient culture,
the traditions of the country make the Indian textiles sector unique in
comparison to the textiles industry of other countries. This also provides
the industry with the capacity to produce a variety of products suitable to
the different market segments, both within and outside the country.

Investments
The textiles sector has witnessed a spurt in investment during the last five
years. The industry (including dyed and printed) attracted foreign direct
investment (FDI) worth US$ 1,522.51 million during April 2000 to
December 2014.

Snapdeal has partnered with India Post to jointly work on bringing

thousands of weavers and artisans from Varanasi through its website.
Giving Indian sarees a green touch, Dupont has joined hands with RIL
and Vipul Sarees for use of its renewable fibre product Sorona to make an
environment-friendly version of this ethnic ladieswear.
Raymond has launched Regio Italia, a luxurious, elite and finest Italian
fabric for its customers. Regio Italia is a fine collection of fabrics from Italy
with the latest designs that is carefully woven and specially handpicked
assortment of the best designs in formal and occasion menswear suiting
fabrics.

Government Initiatives
The Indian government has come up with a number of export promotion
policies for the textiles sector. It has also allowed 100 per cent FDI in the
Indian textiles sector under the automatic route.
The proposal for imposing duty on branded items was dropped providing
relief to the entire value chain. The Ministry of Textiles, Government of
India plans to enter into an agreement with Flipkart to provide an online
platform to handloom weavers to sell their products.
Detailed arrangement for purchase of cotton from the farmers by the
Cotton Corporation of India Ltd (CCI) under the Minimum Support Price
Operation was monitored. 343 purchase centres were finalised in
consultation with the State Governments after meetings with officers of
CCI and the cotton producing states, resulting in streamlining of
operations.

Road Ahead
The future for the Indian textile industry looks promising, buoyed by both
strong domestic consumption as well as export demand. With
consumerism and disposable income on the rise, the retail sector has
experienced a rapid growth in the past decade with the entry of several
international players like Marks & Spencer, Guess and Next into the Indian
market. The organised apparel segment is expected to grow at a
compound annual growth rate (CAGR) of more than 13 per cent over a 10year period.

E-Commerce Industry
E-commerce industry has witnessed tremendous growth and attention in
last 2 years and its rampant increase in scale and coverage has set the
growth story next best to rapid expansion of software industry in early
90s.

Going by the extensive studies on the growth of this mysterious giant in

making called ecommerce, the primary reasons can be attributed as
follows:

Rapid increase in internet penetration

Availability of much wider product range compared to what is
available at brick and mortar retailers
More convenience offered in online shopping.
Lower price and more discount offers available in online channels
Evolution of intermediary and marketplace model reducing cost
even further & scope of increasing product depth and width.

The main reason for choosing Jabong and Pantaloons is to identify the
difference between an online e-commerce store and a brick and mortar
store. The other elements are almost similar. The product category
offerings of both Jabong and Pantaloons are quite similar. Both the stores
believe in high fashion

Jabong
Jabong was launched in early 2012 by Praveen Sinha as an e-commerce
portal to cater the fashion needs of men, women and kids across
footwear, apparel, jewellery and accessories.
Jabong has the tag line of Be You and caters several categories of
branded listings. They were late in entering the fashion e-commerce
market, but something differentiated them from their competitors. First,
they introduced right brands on their platform, mostly those that were not
available offline in many parts of the country. Secondly, they worked with
user friendly features like express delivery; 30-days return policy and open
box delivery which gave them better customer experience. And, finally,
they indulge themselves in fashion curation and thus came closer to the
fashion community in the country.
According to a report from internet analytics firm ComScore in September
2012, Jabong.com had the second-highest volume of traffic among Indian
e-commerce websites, in just a few months of its launch. The platform
counted 1.9 million gross orders in the first quarter of the financial year
2014, according to a disclosure by Kinnevik, an investor in Jabong.

The report further indicated that Jabong, in March 2014, had a total
customer base of 2.9 million, as opposed to one million in the
corresponding month last year. In December 2013, Jabong crossed $25
million in revenue. The fashion e-commerce market in India is currently
valued at $20billion and is expected to touch $35 billion by 2020.

The Big Idea of Jabong

Jabong was founded in the year 2011; however it started its operation in
January 2012. When most of the e-commerce players were focusing on
offering huge deals and discounts on the products, Jabong focused on
varieties, increasing categories, widest assortment, express delivery and
excellent customer services. This, over time has led to the strong
customer base.

Business Model
Jabong.com follows both inventory model and a controlled marketplace
model. In inventory model, products are sourced from brands and stored
in the Jabong warehouse. In controlled marketplace model, Jabong doesnt
store the inventory but takes care of the Fulfillment, customer Service,
and Returns if any. Interestingly, Jabong (like any other Rocket Internet
business) is built by consulting people, rather than hard core operations
professionals.

Marketing Strategies
Currently 90% of the companys budgets are going towards digital and
rest 10% are invested in TV and OOH. Jabong is using digital marketing to
enhance the transactions and revenues and social media to increase
engagement. Off-line media are used to generate awareness in small
towns and cities.
Jabong used affiliate marketing to add advantage to the business and
ran cost per sale (CPS) campaigns with many affiliate networks in India.

The payout being offered to the affiliates was upto 10 percent of any
sale.This ensured Jabong getting huge number of customers only through
affiliate marketing.The sale is processed within 15 days after month end.
The payments to the affiliate marketers would be made on the basis of the
Final Validation Report and within 60 days of after activity month.
Further, Jabong distributed shopping vouchers worth Rs 2500 to the
users for first sign-up.
In order to retain its members and make them visit again and again,
Jabong adopted an impressive tool that was email marketing. Jabong used
to send promotional emails every day to each of their members about new
offers for sale. Their E-mailer to registered users talks to customers on the
promotional aspect and try to engage the audience to get the click.

Jabong also regularly posted interesting articles on their blogs to

increase brand awareness and engagement.
Jabong utilized Facebook marketing opportunity efficiently. Within few
months of their launch, it crossed over lacs of fan following on their
Facebook fan page.
Jabong also used banner advertisement to get new visitors on the
website.
In Jabongs digital strategy its Facebook page has recently crossed 3.6
million likes, and has 119K+ followers on Twitter. They publish 1012updates a day and almost all of them are self-promotional but still are
able to engage the audience.

Pantaloons
Pantaloon Retail (India) Limited is Indias largest leading retailers. It
operates on multiple platforms like Value and life style segment in the
Indian consumers market. Company headquarters located in Mumbai. As
on Feb 2009 Company operates over 12 million square feet of retail space,

1000 stores in 71 cities with employee strength of 30,000 people. The

company is in aspect of giving retailing a modern look with reachable for
middle and middle lower class people. Retailing includes retail formats like
Pantaloons, Big bazzer, Food bazzar, brand factory, Blue sky, and Top 10,
Star & sitar and e zone. The company also operates on online future
bazzar.com for upper class that can get internet connectivity. Home Town
a large-format home solutions store.
Pantaloon Retail is the flagship company of Future Group, a business
group catering to the entire Indian consumption space. Future Group led
by its founder and Group CEO, Mr. Kishore Biyani, is one of Indias leading
business houses with multiple businesses spanning across the
consumption space. While retail forms the core business activity of Future
Group, group subsidiaries are present in consumer finance, capital,
insurance, leisure and entertainment, brand development, retail real
estate development, retail media and logistics.
The company was established in 1987 as Manz wear private Limited
launched its first product Pantaloons rousers. In May-1992 company
offered Initial public offering. The company enters in modern retails
business in 1997 from Kolkata with 8000Sq.ft store. In 2002 company
initiated a lunch of food chain market Food bazzar. In 2004 central mall
was lunched to concentrate on India one sector launched near brigade
road in Bangalore.
In 2005 group moves beyond retailing starts diversification and in
organic growth by acquiring galaxy entrainment, Indus League clothing
and Planet retail. In 2006 company starts finical facilitation company to
help internal need Future capital Holdings. Starts its first Home building
and improvement product retailing in Bangalore. Starts joint ventures with
Staples, US based company and with Genreali a Italian Insurance major.
In 2007 Group had turnover of $1 billion. Specialized companies in retail
media, logistics, IPR and brand development and retail-led technology
services become operational. In 2008 big bazaar crosses 100 malls
The company observes retail customer trend and changing consumption
tastes. Organization is customer driven opposed to product driven
.Company is very conscious about culture and regional consumption
pattern. Strategies change frequently due to orient to the customers
needs. The continues of learning, unlearning and relearning is applied to
update the quick changing strategies across the organization. As Kishore
Biyani MD Pantaloon retail India LTD says Retail is like riding bicycle. In
uphill if you stop pedaling you will slide down. The statement express the
need of continues learning process to form the strategies.
Based on analysis its business strategies can be categorized in 3 major
groups. They are

Diversification strategy
Classes destination strategy
Maximum market shares strategy

Diversification strategy
The company started its business as textile manufactures but
growth in modern organized retailing attracted the company to switch
diversify to the next consumption pattern.

The company diversified and acquired a large business in organic and

inorganic way. But company did not forget ripe its strategy and values in
the diversified company. In every new business company started to
rewrite the rules by retaining values. The company in latter stage
organized to support each other by physical material flow if required.

Classes destination strategy

Future group has diversified its business keeping the retiling as
common goal. To set and concentrate on one stratum is main objective of
this strategy. Each business is set to operate on defined strata. Company
has divided Indian customers in three different groups. INDIA ONE, INDIA
TWO, INDIA THREE. Each has different values, products and quality
requirements.
INDIA ONE or consuming class .The population of this constitutes only
14%.Till recent times the modern retiling formats is offered for this class.
According Maslows theory of hierarchy the 14% people are in selfactualization and Esteem needs in the pyramid. For this class pantaloon
patterned Future bazaar, E zone, Central, brand factory, Home town and
star Galaxy entertainment.
INDIA TWO or the serving class it includes people like house hold helpers,
office peon etc. This is the people who make service INDIA ONE class. The
population of this class is more than 30%. In the needs hierarchy they are

located in for Social and security .Earning capacity of this class is 60%
lesser than INDIA ONE. For this class as the big bazaar, Food bazaar,
Future money and other retail formats are presented.
INDIA THREE or struggling class. The class led life on hand to mouth
existence. They cant afford for beater living style. This segment doesnt
contribute much in the contribution cycle. The need of the segment is
local as they are finding it cheaper. The present business model is not
addressing this class.

Figure shows change in consumption patter by different class in 2001-02

and 2007-08.INDIA ONE has changed from 25% to 35% normally the total
profit in this segment will comparatively 20% more than they are sold in
next segment. As ambiance is factor and other pleasuring non value
added services are necessary. INDIA TWO has not changed it conception
level. INDIA THREE has seen 10 % decline.

Maximum market shares strategy

The retail chain by pantaloon in all business patterns tries to achieve
maximum market share in all the products or service it provides .The
Company does not bothers about short term profit or loss by a strategy.
This are considered as learning. The business will sell at marginal profit
some times to attract the new customer who will prove potential
customers in future. The strategy achieved by focusing pricing factors in
INDAI TWO and on service and quality in INDIA ONE.

Pricing strategies
Pricing is strategy used by Pantaloon retail chain to attain maximum
market shares. The company offers numerous schemes to attract the new
customer as well as to retain the present customers.

The companys schemes are categorized in following groups

Value pricing

This approach is used where external factors such as recession or

increased competition force companies to provide 'value' products and
services to retain sales. The product value will be associated with external
factors.

Promotional pricing

Pricing to promote a product is a very common application. The

application of this done by BOGO (Buy one Get One), BTGO (Buy Two Get
One Free) etc.

Bundling

Bundling is marketing tool sell two or more complementary product as a

package with attractive price. The price is will lesser then individual
selling price.
Example:

A Person needs one soap for a period of time

But bundling with attractive price with more than 3 soaps can attract
them.

Low interest rate financing

Future money helps in asset purchase at 0% interest.

Physiological discounting

In India this approach is called as Bata rating system. Organization utilizes

this approach when product has emotional value rather than rational
value.
Example a product is priced for 99 instead of 100.When board shows price
reduction from 100 to 99, Consumer looks at 3 digits to 2 digits rather
than exact value.

Time pricing

The innovative way of attract the customer is Timely pricing it is known

that during holidays rate of customer is more. Reduction of profit margin
with lot of advertisement will invite new customers. The company has
learnt it from strategy made on public holiday 26-Feb. When the turnover
of the day reached 30 cores where average is 5 cores.
With such experience crowded management is essential so to divert
potential customers Wednesday bazaar where it will offer less profit
margin sales.

PANTALOONS:
The typical store layout of Pantaloons is as follows:

The store layout, the design and display of the store and the planogram of
the store are generally decided by the head office of Pantaloons in
Mumbai. The head office trains the people of other stores before changing
the display of the store. This is generally done 2 times a year. They have
identified a periodic change of fashion and identified two periods namely
the spring-summer (march-july) and autumn-winter. The discounts are
generally given in the period of spring-summer. This is generally known as
the sale period. The display of the store during the sale period is
completely different from the display of the store in the non-sale period.

Customer Insights:
JABONG:

Website and App home gives look and feel of a fashion magazine.
They even have a blog within jabong where they write about beauty,
celebstyle, fashion. There is also monthly e-magazine called juice
mostly for women.

The color and feel of the website also reflects the bright and fresh
view of a lifestyle stores as pantaloons.
Category listing is both product wise and brand wise (for browser
mode or magpie mode). For customers in blinkered mode, there is
the search bar.

PANTALOONS:

Manual counting ticker with the security guard

Customers at mens section mostly come in browser mode
Only 3 out of 10 customers in Men section comes alone. Rest
either comes with a lady (mothers, girlfriends or sisters)
Apparel are arranged in neat rows and columns of same color.
The newest fashions are hanged or worn over dummy model
The color of the sections at the walls sends a signal of the mood
of the product. The men formals had a sophisticated black with
grey stripes, the sports section has bright yellow style
highlighting active lifestyle. The mens innerwear section had a
totally black wall which reinforces the for men feel.
In entrance there are perambulators and wheelchairs

WAY AHEAD FOR PANTALOONS:

The brick and mortar apparel retailers like pantaloons are facing a serious
threat from their rivals in the e-commerce segment. The decision made by
pantaloons to form strategic tie-ups with e-tailers like Jabong, Trendin,
Flipkart is an important move to counter the e-commerce.
Pantaloons started to sell its private label brands on these websites by
forming strategic ties. The advantages of this are:

It can have a presence on e-commerce and increase the target

audience by improving its customer reach.
It can convert its private label brands into venture brands by selling
on multiple channels instead of selling only in their stores.

The model implemented by pantaloons can also be implemented by other

retailers so that it would be an advantage to them to stay in the intense
competition of apparel industry.