What happens when a fast-fashion company collaborates with an Indian couture fashion designer to woo the millennial market across India to climb up the retail ladder? In terms of absolute numbers, at 426 million, 36 per cent of India's population comprises of millennials which is much higher than USA and China. So, obviously, for retailers, the Indian millennial appears to be a drool-worthy cohort to target.
Has such collab taken place earlier in India? Well yes, in 2005-6, Manish Arora’s brand Fish Fry collaborated with Reebok to create limited-edition footwear. Though I have no clue whether this collab helped Reebok to increase sales (and vice versa) but we all know that Reebok is not H&M and Limited Edition is a different ball game than retail mass market! However, I am more concerned about Sabya or Pepsi (we used to fondly call him at college) aka Sabyasachi than H&M. H&M (in the fiscal year 2020, global net sales of the H&M Group amounted to about 20.2 billion U.S. dollars) has nothing to lose in India, at this moment. Being a 2.76B conglomerate worldwide and targeting India for Rs 2,000 crore in turnover from India (BS 2020) what they have to lose if this collab fails?
In other side, with a net worth of Rs. 109 Crores and a popular TV show called Band Baaza Bride (many episodes are almost rags to riches stories presented as bridal dream), Sabyasachi successfully built the desire among Indian millennial to wear his creations during their wedding. The spending in wedding across India is super-big. As mentioned in the Firstpost, the Indian wedding industry, estimated to be worth $50 billion (by a KPMG report in 2017), will reach 35 percent of pre-COVID 19 levels in 2021. We all know that the idea of ‘eventful gala shadi (Indian wedding)’ has been fed to the mind of every girl child in India for centuries. In India, the marriage is not only an occasion for two individuals to unite but also an occasion (which has become a good example for my lectures on conspicuous consumption theory) where most of the families splurge to exhibit their social status. This is where Sabya got his niche, like many other Indian designers who survives over the shaadi season. However strategically, he has been able to spread his cloths to all other occasions, celebrated in India. Sabya is also very good to map the millennial mind-set and remains active in instragram with worthwhile causes/ issues to exhibit his support through collections / shoots (ie. plus size model, gender inclusive garments etc.). Though he did his share of insta-mistakes and in one post he stated that ‘overdressed’ women are emotionally wounded, which outraged the netzines. But he was quick to float an unconditional apology. So, Sabya has a love-hate-love relationship with millennial gen not only for his clothing but also the statements. But till date, Sabyasachi kept himself confined in niche luxury market. Though, last year we applauded him for his collaboration with Citta organization to create beautiful school uniforms for the underprivileged students of Rajkumari Ratnavati Girls school in Jaisalmer.
We all know that collab is not new for Sabya. In 2017 Sabyasachi, Kolkata collaborated with Christian Louboutin, Paris (famous footwear couturier) to present an exclusive, ultra-limited edition capsule collection for women and men. Exclusive sari fabrics of Sabyasachi were reinvented through classic Christian Louboutin styles for this luxury collection. L’Oreal Paris had an exclusive range of lipsticks with colors selected by Sabyasachi. Bombay Dyeing collaborated with him to launch a range of bed spreads. One can easily observe that he collabs are not only in one tangent but there is no pattern in it! Right from footwear, lipsticks to bedspreads! Then why am I concerned with his Collaboration with H&M?
Let me tell you two case studies. One is of Diane von Furstenberg. As per Harverd Business Review Diane von Furstenberg created the multifunctional wrap dress in 1972,which captured the imagination—and the pocketbooks—of a generation. By 1976, she had sold more than five million of her designs and was hailed by Newsweek as “the most marketable woman in fashion since Coco Chanel.” Von Furstenberg didn’t stop there: She developed a line of beauty products and fragrances and stamped her name on everything from luggage to eyewear to jeans to books. The strategy worked at first. Von Furstenberg’s premium name generated high margins for every product it adorned, regardless of the category. But a few years into this heady growth, the brand lost momentum. Revenues and profits plummeted, and, ultimately, von Furstenberg had to sell her design and cosmetics houses to pay off debts. Another case is of Pierre Cardin. HBR stated that the brand’s early extensions into perfumes and cosmetics in the 1960s succeeded so well that the company began to sell licenses indiscriminately. By 1988, it had granted more than 800 licenses in 94 countries, generating a $1 billion annual revenue stream—and profits plummeted. It wasn’t until the Pierre Cardin name started appearing on wildly nonadjacent products such as baseball caps and cigarettes that margins collapsed. Initially, the brand extensions into the perfumes and cosmetics categories were successful because the premium degree of the Pierre Cardin brand transferred undiminished into the new, adjacent categories. Though, the fashion critics call these expansion and ‘beautiful failures’ as Cardin’s motivation to democratize fashion, but Mergen Reddy and Nic Terblanche strongly put forth their opinion in Harvard Business Review in 2005 that ‘Luxury brands better not extend’ to keep their exclusivity alive.
In a truly diversified pluralistic nation like India, democracy is a romantic idea but not in the space of lux. According to my Theory of Adopted Differentiation (2006) I have stated how the urban In’glo’dian youth segment continuously adapts to various sophisticated, complicated yet cool look and attitude to differentiate themselves from the mass. This cohort not only continues to differentiate themselves through fashion but also through various gadgets, social media platforms and communication tools. The brands don’t understand that all the youth in this country doesn’t belong to same psychographic segment and there are multiple examples of failures when they tried to democratise the product. Very good example is Orkut, a social media which was popular at a time and the moment it strated to get crowded with ‘locale’, the in’glo’dians left it. This is happening with facebook too. The fall of Blackberry also can be credited to their greed to democratise the product by offering an affordable BB. The failure of historic car Nano (from tata Motors) can also be attributed to the same. In the year 2009 I have predicted that Nano will have a downfall cause Mr. Rata Tata tried to democratize the automatable market with a statement where he stated that Nano will replace all two wheelers with four wheelers! Unfortunately, he failed to understand that automobile is not a consumer good (unlike a two wheeler) in India but an item of ‘desire’ and luxury. One climbs up the social ladder by buying a car. I can envision that Sabyasachi is also heading towards the same disaster through this kind of collaborations. He failed to understand that H&M is not a luxury brand but a rapidly saturating retail business entity. A survey conducted between mid-September and mid-October 2019 (as YouGov-Mint Millennial Survey) shows that Indian millennials are much more likely to purchase high-value assets compared to either pre-millennials or post-millennials in the coming years. Among millennials, it is the richer lot who are more likely to make high-value purchases or buy consumer durable. So, obviously, the richer millennials will look for better and more distinct luxury products/ brands, which will differentiate them from the not-so-rich cohorts.
However, the Pierre Cardin syndrome is very common among many designers who want to ‘reach further and expand’, and finally fall. In India, the moment Sabya becomes accessible to all through H&M, the In’glo’dians will drop out from his palate. Yes, as the result shows, there will be a visible ‘great leap’ initially in sale and ‘all products will be sold within minutes’ but that is how every other fall started! Because, the mass retail not only kills the flavour of the brand but also the quality of products, which is suicidal for a couture brand. The extension and collaboration will work if he remains in his segment (luxury and couture).
Though, I must add that ‘Sabyasachi, Kolkata’ brand doesn’t belong to Sabyasachi anymore as the decision-making porwer being bestowed to Aditya Birla Fashion (a retail brand in India) as it bought 51% stake in luxury designer brand Sabyasachi for Rs 398 crore. So, I wonder whether Sabya already planned his exit from fashion business and hence never bothered for critical deep thinking about the impact of collabs on the way.
(first published at INgene: http://ingene.blogspot.com/2021/08/a-suicide-mission-or-intention-to.html) Copyright to Dr. Kaustav SenGupta
*Note: there was a fatal mistake of mentioning M&S rather than H&M. Must thanks Dr. Shalini to indicate that. Humbled.
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