The Business of Apparel B2B Way

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Business to Business or B2B platforms are changing how apparel business happens in the country as they bridge gaps between manufacturers, traders, brands and retailers

The apparel industry is a huge contributor to the Indian economy, both in terms of its share within the country as well as exports. Investments in digital segment have helped sectors like beauty and retail, so the apparel brands can take learning from their successes and benefit from the online platforms. There are various online B2B marketplaces in India that help the apparel segment in trading and conducting their business transactions.

The Concept

B2B (business to business) platforms are the online marketplaces where business transactions like exchange of products, services and information are conducted between various manufactures and vendors rather than between businesses and consumers. It can also be defined as world wide website on the internet where products and services are bought and sold from a variety of suppliers. Apparel designers/manufactures/retailers connect with other product or service providers on various online B2B portals looking to get the best deal, convenience and easy processing. ”B2B apparel platforms are like online wholesalers who provide their customers, i.e. designers/retailers/ stores to buy from a varied range of services and products across apparel categories like Men, Women, Kids etc. It works upon networking and collaborating with various manufacturers and vendors across cities and makes it simpler for both the parties to get connected and do business together. The buyers in the B2B platform gets to make their choices from a wide range of required products like garments/ fabrics/ accessories etc. which is available to them across registered vendors on the portal. This also provides a security to both the transacting parties since both are registered on the portal,” says Harsh Bhotika, Founder, Warp n Weft.

Convenience Matters

According to Anil Agrawal, Co-Founder Ensologic E-Commerce, B2B is a technology-based supply chain ecosystem which connects manufacturers and retailers directly by adding multiple values for any industry. “B2B platform gives an opportunity for the retailers to have vast and big Catalogue choices to choose from. It makes them free from a geographic distance of the supply chain. Hence opens the possibilities for brands to sell worldwide. Another point will be that it gives them to supply at a reasonable price and supply chain is at their doorstep. This makes the credit facility easy, depending on the platform to platform,” avers Agarwal. Along with retailers, manufacturers also have a big edge due to a big retail network, less stock stuck as there is a wide supply chain, better pricing and a direct approach to the market trend. Udaan is among the most-prominent and a Business-to-Business marketplace for brands, manufacturers and traders who engage in free-trade with retailers.  With over 10,000 traders and manufacturers and over 3 lakh + Retailers with 9 lakh + designs on the platform, Udaan transacts over 2000 tons of clothing orders every day with one order placed every two seconds and a total of 1.12 lakh orders and two out of three orders dispatched the same day. Apparel brands like Gajiwala, Mahaveer Fashion, Bahubali, Tejoo Fashion, Lux, Rupa, Lyra, Toodles, Magic Train, Maple, Kinder Choice, Krazy Girl, Ahhaaaa, Ruf & Tuf, Newport, Mafatlal, Advance-18,  are available on the platform. Shraiyaa Aggarwal, Senior Marketing Manager, Udaan avers, “access to an already engaged audience is the primary advantage of this platform. Also ‘Udaan’ has an extremely low cost of entry. Expanding the reach of the products to new customers nationally and test out new products with different markets is possible too.”Demand Drivers

Apparel nowadays is becoming as important part of the purchasing decision as far as grooming is concerned. This is the result of the more choice which is now more accessible than ever before. Added to the fact that platforms today offer attractive discounts, apparel continues to drive a lot of business. “Due to the fact that B2B is fast and quick, has an organized auto approach system is used to help in better planning that will eventually make the scaling of businesses easy, this segment is certainly growing the market,” says Agarwal. Ester John Mathew, Owner Esthu Willies, a newly launched formal and casual shirts brand says, “the apparel business is growing in India especially through online platforms. We launched Esthu Willies formal and casual shirts which are made from Gizza cotton fabrics. Our prices are affordable in a highly competitive market. Though many cotton brands are highly priced, we offer affordable prices for our products. Our shirts will be available through online platform in the forthcoming festive seasons.” Online B2B platforms are a boon for small and medium scale apparel businesses and manufactures of the country in terms of generating revenue. It is an important platform for getting connected globally and a major venue for global wholesale trade too. B2B platforms are the major market place for cross border trade of the apparel business and helps small and medium businesses to expand to overseas market. “It is a great platform for the overall apparel market where businesses can showcase products ranging from raw materials to finished goods. This also serves a major concern of the manufacturers as they can procure the raw materials on a click of the mouse button and do not have to go through the hassles of importing. The sellers can display most of their products and the buyers would have a variety to choose from and on a competitive pricing since it is a single platform which is common for small and medium enterprises, large enterprises as well as individuals,” adds Bhotika.

Now Trending

B2B platforms like Meesho and Glow Road have seen great growth only due to their ability to make world trends accessible to Indian sellers. Meesho incidentally has received a USD 25 million funding from Facebook. “B2B apparel portals work according to the latest fashion trends prevailing in the industry and is also based on the consumers’ requirements. Some of the trends are seen in forms of ruffles, frills, asymmetrical designs, capes, layers, one shoulder, pastel shades, handwork like zardosi, Kashmiri handwork, gota work, lightweight embellishments and intricate embroidery,” opines Bhotika. In fact India’s largest textile and global conglomerate Raymond is said to enter into the B2B ecommerce fray with the intention to connect over 2500 retailers across India and will be extensively using artificial intelligence (AI) as well.

Overcoming Challenges

The biggest challenge is that the Indian apparel industry is largely unorganized with more than 50% of the players in the unorganized sector. Conversion to an organized sector though possible is time consuming. Other challenges include provision of credit facility, quality authentication, the problems involved in the initial stage of B2B, the lack of maturity in the market and Government policies including a much complicated tax structure. “In spite of the advantages reaped by the apparel businesses in the country, there are various challenges faced by them in B2B platforms. The first and most important challenge being, the difficulty of accurately accessing the products through the images, as the pivotal aspects like colour, touch, feel etc. are difficult to be communicated online, thus affecting the decision making process of the buyer. Another challenge faced is the difficulty in describing the product since there are lots of reviews by the industry experts and comparisons based on individual reviews. Thirdly, there are various stakeholders involved and the purchase managers rarely make an independent buying decision, which leads to delays. Lastly, the impulse buying factor is missing in B2B platforms as organizations purchase products based on the needs of their buyers,” says Bhotika. India’s domestic apparel market size is projected to grow at 11-12% CAGR and reach about $160 billion by 2025 and the B2B platforms are certainly helping fuel this demand to help the industry beat these numbers.

This story first appeared in Apparel Magazine’s July 2019 issue here:FEATURE -B2B PLATFORMS

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