Detachment from India – Newspaper Kommersant No. 17 (7462) dated 01/31/2023
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Companies from India may become new contenders for the Russian clothing market, which has lost international brands. For example, Northern India Trends, a clothing manufacturer and exporter, made the first steps to work in Russia. However, experts doubt that the company will quickly deploy points of sale. Although textiles from India were popular in the former Soviet Union during the Soviet era, now brands from this country, according to experts and industry participants, “do not withstand the demands of the market.” An alternative direction of business in the Russian Federation for Indian companies may be the search for orders for the manufacture of clothing from domestic brands.
Northern India Trends (NITC), a manufacturer and exporter of women’s and children’s clothing from India, is preparing to enter the Russian market and is starting to form an office in Moscow. This follows from the vacancy of a representative of an Indian company in Russia published on the Headhunter portal. Northern India Trends did not respond to Kommersant’s request by Monday evening.
NITC is considered a major clothing manufacturer and exporter in India, says Olga Antonova, head of retail real estate at the Commonwealth Partnership. The company does not have its own retail network, it provides production facilities for tailoring collections for Western brands Maje, Monoprix, Urban Outfitters and develops its own collections in collaboration with European designers, according to the NITC website. Therefore, it is unlikely that the company will immediately begin to develop its points of sale in Russia, Ms. Antonova believes.
Most likely, the company will sell non-branded clothing, says Alexei Vanchugov, managing partner of Vanchugov & Partners. According to the head of the CORE.XP retail department, Marina Malakhatko, the opening of an NITC office in Moscow may be associated with plans to “sew collections of Russian brands at their factories.”
After international clothing retailers left the Russian Federation due to the military operation in Ukraine, Indian brands began to show interest in the Russian market.
Back in April 2022, The Economic Times reported on the possible opening of stores in Russia by the Indian home goods retailer Maspar, clothing chain Killer Jeans. Crocus Group is also negotiating with retailers from India, notes Marina Malakhatko.
The share of brands from this country that announced plans to enter the Russian Federation amounted to 4% of the total number of announcements, estimates Nikoliers. But today none of the Indian chains has entered the Russian market, Ms. Malakhatko clarifies.
According to the Executive Director of the Federation of Indian Export Organizations (FIEO) Ajay Sahay, the problems of entering the Russian market as a whole for all business from India arose due to problems with logistics. “But now alternative delivery routes through Turkey are being considered,” he says, adding that this will increase trade between the countries this year. FIEO predicts that in 2023 India can increase exports to Russia by about $5 billion.
Before the geopolitical crisis, this country practically did not export clothes to Russia and Indian retailers were not represented in the Russian Federation. In recent years, according to the country’s Ministry of Statistics, tea, coffee and spices (by $102 million in 2021), as well as pharmaceutical products (by $417 million) were shipped from India to the Russian Federation most of all consumer goods.
However, in the 1970s, clothes and accessories from this country were presented in many large cities of the former Soviet Union in the Ganga stores, of which there were only two in Moscow – in Golyanovo and on Smolenskaya Square. As in Soviet times, now India, according to Mikhail Burmistrov, CEO of Infoline-Analytics, is interested in exporting consumer goods to the Russian market.
At the same time, Marina Malakhatko is skeptical about the prospects for the development of Indian fashion brands in Russia. Often, retailers from this country do not use the highest quality raw materials for the production of clothes, and the design does not always correspond to the trends of the time, the expert explains. Olga Antonova believes that the Russian market for retailers and manufacturers of clothing and accessories remains a market of opportunity amid the departure of other players. According to NF Group, in 2022, 11 international brands entered the Russian market, which is 27% less than a year earlier. At the end of 2023, consultants predict that this number will not increase much.
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