Ananya Chatterjee, 31, has her pulse on the latest fashion trends, but is averse to splurging on pricey clothes. The Dehradun resident has long since ditched her salwar kameez for high-rise front-pleated trousers and finds floral patches on sweaters and suede jackets trendy. Taking a cue from changing customer preference, New Delhi-based apparel brand Cantabil Retail has placed its bets on the smaller towns, which are largely bypassed by global brands, for its next phase of growth.
“We are aggressively looking to tap the increasingly affluent set of consumers living in towns like Chandrapur, Jhajjar and Bhiwadi, who are exposed to global fashion and is demanding the same products and services that metro-dwellers have easy access to,” Deepak Bansal, director of Cantabil Retail, told TMS. The company will invest around `25 crore to open 110 outlets in 2020, mainly in tier 3 and tier 4 towns, taking the total store count to 400, he said.
Dehradun, Patna, Chandrapur, Bhiwadi, Jaipur, Dungarpur and Mahendragarh are among the towns to have a new Cantabil outlet. State-wise, major expansion will be carried out in Maharashtra, Gujarat, Rajasthan, Uttar Pradesh, Madhya Pradesh, Jharkhand, Bihar, West Bengal and parts of North-East, Bansal added.
Experts say it is the crowded retail scene in metros that have prompted retailers to focus on smaller towns. “Retailers are struggling at various fronts apart from rising rentals: Under-performing, less efficient stores with huge inventory pile-up of merchandise, stiff price competition from dominant e-commerce players and poor inventory management are some of the challenges retailers are facing,” said Shubhranshu Pani, MD, Retail Services, JLL India.
To deal with these challenges, he said, retailers are shifting to tier 2 and 3 markets, where the brand presence is minimal. Also, the real estate costs in these markets are 30-40 per cent lower than those in metros. On the other hand, urban consumers are switching their wardrobe choices to global brands like Zara, Hennes & Mauritz (H&M), Forever 21 and the likes, thereby hotting up competition in the retail space.Consultancy firm CBRE estimates that the organised retail sector, which is growing at a high rate of 20-25 per cent per annum, would grow to $1.1 trillion by 2020, driven by rising income, urbanisation and attitudinal shifts.