The Hindu Business Line : Fabric majors bet on small towns for growth

If you think metros are the only money spinners for brands, think again! Top fabric companies are increasingly shifting sales focus to the Jalandhars, Belgaums and Burdwans — earlier non-existent on their growth maps — for these tier II, -III and -IV cities are seen to be high potential destinations.

Companies like Grasim, Raymond and Reliance have short-listed even towns such as Chas, Kulti, Bokaro and Purulia, as the growth drivers for their fabric-based businesses.

Said Mr S. Krishnamoorthy, President and Unit Head, Grasim Industries Ltd, Textiles Division, “Till now the Grasim brand was associated with the fashion conscious, elite segment. Now, we deliberately want to take the power of fashion to a larger audience. The aspiration for and the appreciation of fashion today cuts across the spectrum, with small towns also emptying their pockets on brands. Grasim offers this audience not just the style to suit this aspiration but also the association of a Bollywood icon, who symbolises these dreams.”

In fact, Grasim has invested Rs 4 crore in a new television campaign with brand ambassador Akshay Kumar, which focuses on the journey of a small town man who struggles and strikes gold in the Hindi film industry in Mumbai. The company intends to open 25 new outlets in the country, 80 per cent of which will be in the small cities.

Meanwhile, Raymond Apparel Ltd, the wholly owned subsidiary of the over Rs 1,400 crore Raymond Ltd, launched its value-for-money menswear brand in February 2007, Notting Hill, in an attempt to have a share of the Rs 5,300 crore-strong middle class market. This move was also largely seen by industry analysts as the firm’s way of tapping the rapidly growing demand in the smaller towns and cities, mainly captured by ITC’s John Players and Peter England.

However, Vimal, the extremely popular brand of the 70s from the Ambani stable, is all set to make a re-entry. Officials involved in the re-launching plans told Business Line that smaller tier II and III cities are going to form a ma jor part of its roll out plans in the future, though the company would begin its foray from the metros.

An industry expert said, “Disposable incomes are just not a metro-based phenomena, one can see its effects in smaller towns and cities as well. This trickle down effect was bound to happen, given the way the economy is growing.”