In order to understand the key success factors required for any fashion powerhouse to succeed in the global scenario, we decided to look at two of the world’s largest fashion conglomerates – Gucci and Louis Vuitton. We looked at the evolution of these companies and also at the different strategies these companies have employed over time to achieve the position in the world fashion market they have today. This analysis helped us in figuring out the feasibility of a similar fashion powerhouse emerging from a country like India. The complete listing of our findings from these 2 companies from the cases we analyzed is given in Exhibit 1. Shanghai Tang – the Chinese lifestyle brand
After looking at the cases of the 2 global giants, we figured that the context and market in which these companies have operated are completely different from what the same would be for a company emerging from India. In order to understand the aspects of establishing a fashion powerhouse in an Indian context, we took a look at Shanghai Tang, the leading Chinese lifestyle brand. Similar to India, the Chinese market also has a niche segment in the global fashion market, and hence the learning from this company helped us better understand the issues, challenges, key success factors, etc., for a fashion powerhouse emerging from India. Our findings from analysis of the Shanghai Tang company are given in Exhibit 2. Names in Indian Fashion
Although the Indian fashion industry is projected to grow at a high rate of close to 10%, the industry is still largely fragmented with no major fashion powerhouse that provides holistic fashion solutions to its customers. There is still no single fashion house to compete with companies like Gucci or Louis Vuitton. Though there are a lot of individual designers with famous international icons in their list of clientele, none of them seem to have the potential to emerge as a global fashion powerhouse in the near future. An important noticeable trend in Indian fashion houses so far is that most of them are limited to clothes, whereas in order to emerge as a global fashion powerhouse, one needs to have a wide range of fashion goods and brands in their portfolio. In this sense, only JJ Valaya’s “House of Valaya” comes close to being called an Indian fashion powerhouse, with four brands in their portfolio offering haute couture, footwear, cuisine, furniture, tapestries, stunning fabrics and home furnishings. Some of the leading names in fashion in India today are JJ Valaya, Ritu Kumar, Ritu Beri, Rohit Bal, Manish Malhotra, Manish Arora, Rina Dhaka, Tarun Tahiliani, Abu Jani and Sandeep Khosla and Wendell Rodricks. A brief account of these names and list of notable clientele is given in Exhibit 3.
Exhibit 1: Global Fashion Giants: Gucci and Louis Vuitton
Case Study: Rise of Gucci
Gucci or House of Gucci has a rich history. Founded way back in 1923 as a family run leather saddler shop, this company’s reputation soared high right from the start because of its high quality products. After 15 years, they established their first retail outlet in Rome outside Florence. From the modest beginnings of a small family owned shop, Gucci has come a long way to become a leading name in fashion today, with over 400 stores around the world in different countries. There are also several high-end department stores that house Gucci in their shelves today.
Premium leather products such as wallets, bags, car upholstery, clothing and also other fashion items like jewelry, watches, eyewear, ties, perfume, etc.
In the early 1990s, Tom Ford, the CEO of Gucci then put a strategy in place that completely turned the company around and propelled it to the global market, making it the notable fashion label it is today. Elements of the employed strategy are briefly mentioned below:
Pricing: Positioning themselves in the right segment
Lowered prices of all...