The president-business operations speaks about the label's expansion strategy, the growing international business and challenges of marketing a luxury brand.
An 8,500 sq. ft. store at Kala Ghoda in Mumbai. Another 1,600 sq. ft. store in the Dubai Mall. And yet another store in Ahmedabad. With three store launches in one year, 2023 has been quite momentous for the House of Anita Dongre.
After establishing its international presence in New York and Mauritius, the fashion label spread its wings to Dubai in March. Meanwhile, it expanded its India stores to Mumbai in February and Ahmedabad in June. It envisions to become a truly global brand that extends from global fashion cities like New York to even India’s tier 2 cities.
While the brand's brick-and-mortar presence grows, it is also fast growing its digital presence. Calling it a digital-first brand, Yash Dongre, president- business operations, says it is prepared for a shift in consumer's shopping patterns and has heavily invested in overhauling its digital infrastructure.
In an interview with afaqs!, the Dongre scion speaks about the fashion house's expansion strategy, the growing international business and challenges of marketing a luxury brand.
Anita Dongre has established its presence in the UAE and USA now. How different is it to market a luxury brand in international markets as compared to India?
Our strategy varies for each new market. While we always uphold our brand ethos and design sensibility, we also adapt to local preferences. For instance, in Dubai, we cater to the Arab ethnicity by offering styles like Kaftans. It's crucial to maintain our design identity while respecting local consumers and localising to some extent. This balance ensures success by offering both novelty and comfort to our customers.
Are the consumers in international markets primarily of Indian origin or are the locals adopting Indian attire?
Our international journey is relatively new, with our New York store open for nearly five years, and Dubai joining this year. Each market is distinct. In the US, we cater to South Asian diaspora, focusing on bridal and occasion wear. We also witness cross-cultural weddings, where we provide traditional attire. In Dubai, our store in Dubai Mall primarily offers ready-to-wear items, targeting an international clientele. In New York, 80% of our customers are of Indian ethnicity, whereas in Dubai, 80% are international. We adapt to each market's unique demands to meet our customers' needs.
Anita Dongre is now a digital-first brand. What does that mean? How much percentage of the business comes from e-commerce?
India's market structure remains predominantly brick and mortar. Online is still discount-driven, especially in the fashion industry. However, the digital boom is already here, and it's a matter of time before the market evolves. In the US, it's common for brands to have a 50:50 split between physical stores and online sales, while in India, it's currently more like 70-80% brick and mortar and 15-20% online. But that'll eventually change, if not 50:50 but at least 60:40. We're prepared for this shift and have heavily invested in overhauling our digital infrastructure. We've migrated to Salesforce and developed a comprehensive Omni Channel system, offering best-in-class website features, CRM, order management, and seamless integration of our online and physical stores. We've also adapted to the changing landscape brought about by the pandemic, as we already had an established e-commerce site. This allowed us to cater to the increased online demand during the pandemic and resulted in significant growth.
During the pandemic our brick-and-mortar business was temporarily closed. However, our online sales, which were around 10%, surged to nearly 20% during that period, representing a significant increase. Now it's about 15-17% online and the rest offline.
What are the challenges designer brands face in the e-commerce world?
For the Anita Dongre brand, we exclusively sell through our own website to ensure high service standards and a premium customer experience. In our online operations, providing exceptional customer service is paramount. For example, when a bride in Australia orders a lehenga from our website, we offer a tutorial video for taking measurements and conduct personalized Zoom or FaceTime consultations with professional stylists. We guide the customer throughout the ordering process, from placement to delivery. Ordering an expensive outfit like a lehenga choli online is a significant investment, and we aim to provide a secure and supportive experience. Our customer service is known for its excellence, ensuring convenience and ease in the ordering process.
In the e-commerce space, dealing with high-value items means returns and exchanges can impact the business. We absorb these costs to provide convenience for our customers. Offering a flexible return policy is essential for customer confidence, even for outfits priced at Rs 3-4 lakhs. While it can result in financial losses for us, our brand's trust and customer loyalty make it worthwhile. In the luxury segment, managing returns and exchanges is more challenging compared to value brands, but we provide these services.
What is Anita Dongre's preferred medium to advertise?
Some brands prefer larger-than-life approaches, while others opt for subtlety. For us, a strategy that's worked is creating strong imagery. We are one of the brands that started the trend of shooting in Rajasthan's palaces to capture the essence of royal weddings. We also prioritise strong video content, leveraging platforms like Instagram. We target Gen Z by utilizing Snapchat and TikTok as they've gained relevance.
Our focus is on digital. A significant portion of ad spending goes into performance marketing, which is crucial for our strong e-commerce presence. However, we ensure our performance marketing is smartly executed, as if we do it in a massy way it can dilute the brand. We focus on specific, creatively controlled ads, not catalog ads. We also maintain traditional partnerships with magazines like Conde Nast and Vogue, which offer a holistic approach, including events and digital properties. Post-pandemic, our spending has shifted more towards digital.
We also prioritise experiential events. Customers today seek brand experiences. So we invite our customers, show them the store and letting them feel the entire brand experience. For us, it's a combination of both digital and physical events.
Recently, Aditya Birla group invested in Shantanu & Nikhil, Sabyasachi and Tarun Tahiliani. These collaborations have made these brands more massy. Is this a result of a more aspirational India or is this essential for designer brands to stay relevant in India?
It's not about being mass-market. The change is that fashion is now seen as a serious business. Traditionally, fashion was glamorous but lacked substantial investments. About a decade ago, we were among the first to receive investment from a major private equity firm, General Atlantic (The US private equity firm invested $20 million for 23% of the House of Anita Dongre). However, fashion wasn't typically considered a serious industry for investment. Now, with players like Aditya Birla and Reliance investing, it's encouraging existing businesses to scale up and inspiring emerging designers to see fashion as an industry capable of achieving significant scale.
International brands are entering India with a 30-year head start in investment and funding. To compete, Indian brands need financial backing to have large stores, flagship spaces, and enhanced customer experiences, all of which require significant capital. Partnering with corporates is crucial for the health of the domestic industry and local designers.
In a previous interview you have mentioned that western trends sooner or later come to India. Considering your international experience, what according to you are some marketing trends in the luxury segment that you foresee in India?
In the past decade, the digital boom has democratised marketing trends globally, reducing the lag between the US and India. The Indian fashion and luxury industry is now gaining serious attention from global brands due to India's economic and population growth. As a result, both global brands and consumers are taking Indian market more seriously. This presents a great opportunity for global brands to establish themselves in India, and for Indian brands to expand internationally. India's creative potential is now gaining the respect it deserves on the global stage, as evidenced by high-profile events like Dior's fashion show in Mumbai. This trend is expected to continue growing in the coming years.