Organic apparels have great potential as well and their exports have been slowly but steadily increasing. With the increase in market awareness, this segment is expected to pick up quickly and grow in a big way. In the current age, global consumers have become nature and health conscious and looking to move away from traditional, chemical products.
Indian organic products have always been a preference by the global markets and there is definitely a huge market out there for organic apparels. There are companies in India which provide even the farm level traceability for their organic apparel products. In conversation with Pawan Gupta, Founder, Connect2India, who are currently working to onboard more textiles, apparel, garments and customised products exporters as they feel that it’s a huge global opportunity.
What are the sectors you’re currently focusing on?
The sector Connect2India truly focuses on as a mission is the entirety of the MSME segment. We want to continue to serve the MSMEs on the whole and we’re focusing on executing exports of multiple products in order to set an example for various industries that will ease the businesses around the nation regarding the possibility of their product to be globally tradable.
At the moment, we are focusing on Agro, textile and apparels, handicrafts, FMCG, Chemical and Polymers and Metal and Alloys etc. though we have customers from other industry sectors as well.
A good percentage of our current clients are in Agro and Textiles and Apparels sector. The Indian textile and apparel products, including cotton, silk and denim are highly popular worldwide, along with many other products.
What are the opportunities in the textile and apparel sector for Indian SMEs to export?
India is one of the largest exporters of textile and apparel products in the world, with USD 37.74 Billion exports in the year 2017-18. Further, the total value of Yarn, Fabrics and Made-ups exports of the country stood at US$ 14.33 billion during 2017-18. India’s share in the global trade of textiles and apparels is around 5 per cent. The main markets for Indian textile and apparel exports are US, European Union, Parts of Asia, Middle East etc. with Latin America and Africa also building up as significant markets for our products.
India is one of the world's largest producers of Jute, raw cotton, cotton yarn, silk, synthetic fibre and cellulosic fibre etc. This combined with demographics; highly skilled workforce in this sector and friendly export policies, the potential to increase our export of this sector is immense. The industry is getting bigger and better each year and India is currently one of the most preferred sourcing destinations for garments, textiles, accessories and finish.
This is also a sector where huge numbers of SMEs are involved. The SMEs in this segment are already globally competitive, we just need to make them globally aware and globally visible and partner with them for end-to-end export.
In the future, India’s apparel exports are expected to increase considerably. Total exports of textiles and apparel are expected to touch US$ 82 billion by 2021 with CAGR of 12.06 per cent and we believe SMEs would contribute a large part of it.
Talk to us about your initiatives in order to increase textiles and apparels export from India?
We are taking a holistic approach. Thanks to our advanced analytics-based integrated trade platform we continuously monitor the global markets for opportunities for our customers and prospective customers. We know for a fact, that the market for textiles and garments is going to grow in the future, presenting a massive opportunity for Indian manufacturers and merchants.
The first step is to bridge the knowledge and information gap and make these SMEs globally aware. We are continuously using our extensive networks to get in touch with SMEs in the said sectors and talking to them about the massive opportunities that are available in the markets for them. Taking advantage of our talented, multi-channel marketing team, we plan on using our social media reach to spread information about the global market opportunities for the textile and garment industry.
We are also working at the grass root level by working with companies who are wholly (100%) owned by smallholder farmers’ (through their cluster level cooperatives). These companies are ensuring fair supply chain and we are trying to promote the export of apparel companies directly buying raw materials from these cooperatives. We also highlight these SMEs on our platform, thereby giving them direct global visibility.
How can the garment industry SMEs, take advantage of your platform?
We are an end-to-end platform for global trade; our solution can help garment industry SMEs from getting ready for exports to finding target markets and trade counterparts to actually arranging and executing an order and turning those into repeat and recurring orders.
Our integrated trade platform helps an SME to enter the market. It processes billions of rows of data to come up with useful trade insights and intelligence for specific products, even at the lowest 8 digit HS Code level. In addition, with our advanced date sciences and Machine Learning Algorithms, we are able to make extremely accurate predictive analysis that helps the exporters in making the right decisions regarding market entry at the right time, country selection, trade counterpart selection etc.
It is important for an SME to choose the right market and invest its resources intelligently. On top of it, the SME needs to be intelligently cost-effective, which requires on point awareness of the prevailing prices to play at the best margins.
The SMEs needs to be aware of export duty, import duties in target countries, incentive and drawback schemes, real-time freight rates, standard and specifications requirements, compliance requirements etc. for the destination country. All of these are available on our platform.
What is the process of enabling and empowering these SMEs to start exporting?
To enable SMEs, especially in the said industries, the process needs to begin from the root levels. While the government has been working towards enabling exports, there has to be a change in the mentality of the SMEs as well. Global trading is perceived to be complex by SMEs, discouraging a huge number of businesses from going global. However, the opportunities are huge out there and in recent times, the ways to make global trade easy and mitigate trade risks have increased as well.
To enable and empower an SME, it is important for the SME to know its potential global markets, which can be done through trade intelligence in the current, digital age. Secondly, a business should have an adequate global presence to be considered or attract global buyers. A company with none or bad digital footprint is less likely to be considered as the potential supplier. Platforms such as Connect2India help SME with global visibility and our platform value also increases the trust in the SMEs capabilities to deliver.
After this, the SME needs to be export ready and be equipped with proper guidance and tools to communicate and arrange orders globally. Additionally, the execution of orders is the most important aspect of ensuring safer trade. Selecting the right payment terms, incoterms, logistics partners, service providers, financial body, T&Cs plays a vital role.
How vital you think is ‘Global Branding’ for SMEs in global business?
I would say, extreme! As I said earlier, if you don’t have an adequate online footprint, you won’t even be considered by new buyers. Having a good global presence and global visibility is one of the key pre-requisites of going global. An SME could be part of an export initiative in the non-branded, contract and branded exports.
Non-branded exports are more like commodity export where there is no differentiation of positioning. It’s good for a quick start and probably a good short term solution but it’s not sustainable and definitely not strategic. More importantly, non-branded exports are only a part of business growth. To be really able to grow your business globally, there is a need for making your product, your brand a global brand, which also means, ‘Branded-exports’. This also enables the platform to help in recurring orders and better terms based on our network and our relationship with the overseas buyers.
For industries such as Apparels, Garments and Textiles, the scope of branded exports and global business expansions are huge, people are continuously looking to find ‘their brand’ of apparel & garments, a brand that would be relatively unique for them and suit them in style, and this is a global, upcoming phenomenon. We believe, the first movers today will be the big ones tomorrow.
How are you driving root-level change in this sector?
We’re making SMEs global enterprises, that are a root level change according to us. Only 1% of the SMEs in India participate in global trade. We are enabling SMEs to go global and go big, we’re opening a market that is multiple folds of their current potential market and the chances of realising that potential is immense.
Exporting in this sector is challenging for SMEs because of the number of steps involved but with our integrated trade platform, worldwide network and our trade experts, we are making it easy and effective for SMEs. Overseas buyers in this sector are generally sceptical to work with SMEs and first-time exporters, but with Connect2India as a conduit, they are now happy to work with this segment.