The ascendance of the South Asian middle class, better education and jobs are at the heart of demographic changes sweeping the region. The empowerment of women – who for decades had limited their role to the household – is having the most profound changes in society. Women are changing the balance at workplaces, and with their new economic power have created demand, especially among young women, for products that make them look good, feel confident and boost self-esteem; trends that have clearly caught the attention of businesses.
Five years ago South Asia’s largest intimate apparel manufacturer MAS Holdings forayed in to India with amantē, its own brand of lingerie, stretching its presence to Sri Lanka recently.Sri Lanka’s top readymade clothes makers, but MAS, have stopped just short of creating their own brands. Two challenges need to be overcome for any major independent apparel manufacturer to launch its own brand. Firstly it’s got to get to grips with contending with the very brands the firm manufactures for, which has proved insurmountable for many. Secondly the business takes on a new strategic direction and a level of complexity encompassing both manufacturing and building a brand, usually unfamiliar territory. Founder, partner and MAS group director Ajay Amalean however relishes the challenge not just of creating a premium lingerie brand but molding a unit at a process driven manufacturing powerhouse to the lithe ways of a brand.
For someone from a manufacturing background – obsessing about productivity and lean production – the rarefied world of brands can be daunting. Business history is littered with egotistical flops of manufacturers trying to cross the divide. Roles are reversed, and Ajay confesses that it was also hard to figure what the Indian consumer wants. The approach was measured; literally.
“Now we understand the Asian woman,” he declares with a glint in his eye. Amantē lingerie is consolidating its third place market share in India’s premium segment and has just launched in Sri Lanka. However before its launch, MAS measured 1500 women across India; certain in its conviction that European or East Asian fits won’t work in South Asia. “A woman maybe a 34-B (bra size) across all these countries but their body structure is different and as a result the fit is also different, that’s what we found when we completed the study,” explains Ajay who spearheaded the Indian launch and has since nurtured it. “Mastering the fit for Asian women is one of our biggest differentiators,” he explains.
With comfort comes greater self-esteem. Price isn’t the topmost factor. It’s perhaps third or fourth on the list. Fashion is important and even more crucial is a snug fit, points out Ajay who together with his two brothers, a quarter century ago started the apparel export business that is today MAS Holdings. “It’s something we have got bang-on, and I’m saying that with a lot of humility,” he says about the fit of amantē products. Compared to the competition in India amantē stands out because it pushes the boundaries of what’s possible.
Amantē is more likely to offer ruby red or rich ivory lingerie with black lace overlay than are any of its competitors. Although amantē’s pushup bras don’t enhance cleavage as much or plunge bras don’t really plunge as deep, the brand’s edgier take on fashion – compared to the competition – attracts a younger and upwardly mobile clientele. The brand essentially walks a tight line not being overly hung up about cultural stereotypes nor being too flaunty.
Amalean family controlled MAS Holdings is Sri Lanka’s largest exporter with revenue forecast to touch $1 billion this year, the equivalent of around 10% of the island’s 2011 exports. The billion dollar revenue includes businesses in which MAS has minority stakes and Ajay Amalean estimates revenue of MAS controlled businesses are likely to be$ 750 million this year. That makes MAS Holdings bigger than any single Sri Lankan listed firm. John Keells Holdings revenue in the last financial year was $ 580 million and Bukit Dhara made $ 530 million.
The sheer scale of the MAS is difficult to ignore. MAS’s 45,000 people make it one of the islands largest employers. Its factories are often held out as models for manufacturing firms, supply chains are world class and productivity, often the envy of competitors and its clients. To not have a brand was clearly glaring. Intellectual property and brands are at the core of the world’s most successful companies.
MAS’s efficient production lines, lean sourcing, superior supply chain and design capability lifts it to the levels of the manufacturing elite. However besides building scale and even tighter customer relationships, options were limited for MAS; until it launched its own brand. “We always wanted to have our own brand,” explains Ajay Amalean who along with brothers Mahesh and Sharad own MAS. India’s mass and an untapped market for the most part and MAS’s manufacturing in India for a decade were attractions.
Amantē, meaning ‘lover’ in Italian has grown 30% a year in India and its Sri Lankan launch has also been a runaway success. The Sri Lankan premium lingerie market is currently worth at least $5 million estimates Binara Seneviratne, who manages amantē in Sri Lanka. By year end amantē will be available in at least 10 department stores and by next year in as many as 50 outlets. Getting the right space and location within department stores has been challenging according to Seneviratne who forecasts 25% annual revenue growth from next year.
Enamor in India is market leader in premium lingerie, followed by Triumph which entered that market a decade ago. Ajay estimates amantē is a close third with 20% market share in the premium segment. MAS, which cut its teeth making lingerie for the world’s leading brands, doesn’t see the Indian premium segment as one homogenous blob. “Because we wanted to differentiate ourselves from the conmpetition we needed e a position that is quite different,” explains Ajay. MAS’s 20 years of material sourcing experience, design and development capabilities, combined with fat stripped production lines to meet tight deadlines is the edge amantē, a separate unit within MAS Holdings, enjoys in India. Despite the manufacturing and supply chain expertise amantē is the group’s first foray in to a brand. “Its tough, in fact we are only just breaking even in India. It’s a tough category because in the minds of South Asian women lingerie is unseen, so they don’t spend much on it.”
Despite these challenges news surrounding the amantē brand has been about uplifting milestones than about sagging demand.
Amantē priced itself in the middle of the premium lingerie market in India. Market leader Enamor was the lowest priced while Triumph’s strategy was to price high the imported stock, and Indian made products lower. Amantē had a sweet spot in the middle which has proved superbly successful points out Ajay, who has an office at the MAS Design unit adjoining one of its factories South of Colombo at Ratmalana where lingerie production floors are state of the art. “We have tried to differentiate ourselves from the competition by offering the consumer with contemporary daily fashion,” Amalean says.
“I think they didn’t anticipate that we would move as fast as we did,” he says about the brand’s Indian success. Often the three leading brands are available next to each other in department stores across India’s main cities. However a growing emotional relationship with Indian women and lingerie is stimulating interest in the sector. Indian couture fashion house Satya Paul also launched a lingerie line, Bwitch, which has quickly captured a share in the premium segment. Premium brands are being promoted in primetime TV and adorn pages of women’s magazines raising lingerie’s category profile and its position in wardrobes.
In rich markets lingerie can account for as much as 18% of spending on a woman’s wardrobe but much less in South Asia where it’s still an item only seen by a husband or a boyfriend. Brands collectively are out to change perceptions about lingerie to claim a larger portion of a woman’s disposable income while striving to also maintain their individuality.
“There is space for more than two people,” explains Ajay of the MAS approach on the priority of growing the category outweighing competition with other brands. He says it’s important to have some sort of common understanding on the way they work by not picking each other’s people and not undercutting. “It’s a category Sri Lanka and India needs to spend some resources to bring it to the level of outerwear, and one brand cannot do it alone.” Ajay says he has already given amante’s Sri Lankan competitor Triumph that comfort and plans to seek collaboration in India too.
Indian society is conservative; it’s generally unacceptable to be seen on the street in clothing that flaunts a bra. A promiscuous lifestyle is also frowned upon. So, besides by the one man in their life, lingerie worn by Indian women goes completely unseen. In contrast the self esteem lifting effect of lingerie for western women is partly it’s being seen by people more often because of the tolerant attitudes to dress in public and the higher number of sexual partners people usually have. Surveys in western markets have found that Women feel sexier in fine lingerie than they do naked.
With India’s premium segment, defined as 20% to 30% of the wealthiest and most cosmopolitan consumers, brands only have the self esteem boost lingerie offers as a selling point, because even a mild flaunt of it on a street will surely draw the ire of bigots. It’s about feeling good the confidence points out Ajay. “We are about an empowered woman, a smart woman, a working woman, a woman who can think for herself, she maybe a housewife but she is a smart and educated housewife.”
Nearly 100 million women make up the ‘premium’ segment or the richest fifth of consumers targeted by the premium lingerie brands in India. Understanding this conservative and fickle market has taken up a greater part of the amantē brands time so far.
Indian lingerie retailing was closeted till a decade ago when the first brands started advertising, specialist stores opened at suburban shopping malls and lingerie clad mannequins appeared at department store windows. However on the flipside media interest and scrutiny of women’s body shape has intensified in the last decades with the embracing of a celebrity culture in India. So a generation of girls is growing up in a country with a heightened self consciousness about their body shape and how that relates to a celebrity sort of definition of beauty.
For generations women’s undergarments in South Asia have been terribly unexciting. Bras made of two stiff cones shaped to suit sari jackets, attached to elastic straps were available in white, off white beige or black. Packed in boxes bras were stuffed away in the deep recesses of department stores to be retrieved by male shop assistants based on size and colour. Panties were even less glamorous– because due to their simpler makeup compared to a bra – were often sewn by dexterous housewives. In Sri Lanka ‘Velona’ a local brand, during the era of import substitution and state control of the economy, almost had a monopoly on cotton panties and later ‘Senorita’ bras, were standouts for their dominance when consumers sought only value.
Indian women shun bright coloured bras under transparent blouses or let thongs ride up over low rise jeans. However it wasn’t possible for MAS to pigeon hole India as one market either. “India itself is like operating in four different countries,” explains Ajay of the reasons for MAS to quickly abandon its strategy offering the same colours and fashions across the country.
In North India, which accounts for 40% of amantē sales, fashion is loud and colourful, “as people and personalities they are also flamboyant ,” Ajay explains. Mumbai is the market most likely to accept ‘Agent Provocateur’ type fashion; it’s cosmopolitan, classy and understands fashion from an international sense. The South is just the opposite dominated by black, white and skin colour bras and briefs and in smaller sizes, a region where amantē has its main Indian operations base in the city of Bangalore. Eastern cities like Calcutta are also tight fisted and buyers usually look for value first.
Overtime MAS has trained a dexterous group of machine operators to put together as many as 35 different fabrics, lace, elastic, snaps, and underwirepieces that make up a bra. Panties are far less complex to sew. MAS’s specialist bra making plant is Unichela at Panadura. Its most skilled machine operators wear a blue cap denoting their ‘jumper’ status or their ability to take the place of any employee on leave from the production line.
Flexibility of its workforce has enabled the firm to quickly replenish the shop floor as products are sold. To achieve high replenishment rates products are manufactured in smaller batches more frequently at MAS’s own factories, from which the amantē unit purchases products. “We have an 85 percent replenishment rate in India. That’s unheard of,” claims Ajay.
A replenishment rate indicates a product’s availability including design, colour and size. This translates in to a large stock because a single design of a bra is available in as many as 14 sizes and three colours, or 42 different Stock Keeping Units (SKU’s). “Generally the replenishment rate is 50 percent (for other brands), so when a consumer comes she doesn’t get what she really wants. That’s a huge differentiator for us,” he says.
Fashion houses are shifting production closer to their main markets to replenish shelves faster instead of having to carry large stocks of every single line. Quicker replenishments means products in higher demand can be reordered before the store runs out. It also avoids having to deep discount end of season items.
Fashion is a fickle business. One season a colour or style is trendy and snapped up and the next season stores have to deep discount similar stock to get rid of it. So instead of betting on what colours or fashions will work amantē observes how consumers react to the new line and produce more of what’s in demand. Higher income earners are getting younger, women’s share of earnings are rising, premium clothing is entering unfamiliar markets and is now more accessible on digital platforms; all add up to too many variables to pick with certainty the season’s hot look.
MAS have equipped factories for faster changeovers making up for the fact that some of its major clients are half a world away. At Unichela machines are wheel mounted and electricity supplied by cabling that hangs down from the roof, making a changeover of a line to manufacture a different product a couple of hours job. ’Quick changeover’ is a system where a new style is developed and tried in a separate external zone. So when it’s time to change over not only can the required machines be quickly wheeled in, these is also no wastage trying to perfect the production line. Bras differ; for instance one may have under wiring and another not – so the required machines and skills of people differ from one style to another.
“If something is selling well they move on to millions of it. How do we do that? It’s because we have the capacity,” explains Amalean of how MAS’s major buyers manage to keep inventory low and adjust to meet demand for trendy styles. A few years ago MAS group did effective restructuring to introduce one seamless production process, reducing transportation and stockholding costs and improving communication which has made ‘Quick changeovers’ possible. “In India people work on this whole volume business… they try to balance price and volume. Most of our competition is working on that and they are holding a huge amount of stock,” explains Ajay of the advantage of the leaner manufacturing.
There are however numerous challenges to growth even for a company with the sophistication of systems and process. Finding suitable retail space, dealing with bureaucracy, retaining a large work force, macro uncertainty like an inflexible exchange rate are challenges for building a brand and running a manufacturing business.
MAS supplies a majority of products sold at Victoria’s Secret the largest lingerie brand in the US. They are also a key vendor to UK’s Marks & Spencer which has a remarkable 11% share of the clothes and shoes market there. MAS Holdings and firms where it has stakes are expected to surpass a billion dollars in revenue this year – ranking them among the biggest in Sri Lanka – and within sight of businesses they supply to. Victoria’s Secret had revenue of $6.1 billion last year and Marks & Spencer $15.4 billion.
MAS founders are focused on managing these relationships more than anything else. “We believe strongly that if you have the relationships the top line will take care of itself. You have the customer’s interest in mind all the time and it makes a big difference in the way you run the business.” Ajay says profits have all been reinvested in the business. “We don’t look at ourselves as the biggest or largest, it has not bothered us really. We have looked at it more in the angle of the quality of the business we run, the type of organization we build, the people who are working with us and the training we give.”