Fashioning supply chains to meet industry's needs
DHL’s recent Fashion Unleashed report revealed that in the high-stakes world of fashion it is becoming crucial for retailers and manufacturers to re-think their supply chains, in response to changing consumer dynamics, demands and expectations.
The report highlights three trends that are currently shaping the fashion sector globally, namely the digital empowered consumer, the rise of disruptive retailers – having the ability to quickly launch new products, and the growth of the global middle class.
According to Sumesh Rahavendra, Head of Marketing for DHL Express Sub-Saharan Africa, the rise of the digital consumer is rapidly changing retailers’ selection and use of sales channels.
This is further supported by the most recent MasterCard Worldwide Online Shopping Survey, which revealed that online shopping is continuing to show increasing growth in South Africa, and confirmed that 58 percent of active users shopped via the internet in 2012, a steady increase from 44 percent in 2009.
Rahavendra said: “Selling online provides an attractive low-cost, low-risk option for gauging consumer demand for certain products.
“Advanced mobile financial services in Africa have also paved the way for mobile commerce opportunities. To overcome traditional infrastructure challenges, mobile payments are fast becoming the norm in key markets such as South Africa, Nigeria and Kenya.”
Another trend identified in the report is the rise of the disruptive retailer. “In a product world, there’s a phenomenon called ‘big bang disruptors’ which refers to products that can create, or destroy, entire product lines and whole markets overnight
“Having the ability to quickly launch new products (whether it be in fashion or technology), replenish and sell at full price, and drive a high volume of customers to a store, physical or virtual, is becoming increasingly valuable in the retail sector.
“Sourcing locally or from neighbouring countries allows for fast replenishment, without the added cost of duties for textiles and apparel,” explained Rahavendra.
International investors are also capitalising on the manufacturing opportunities presented within Africa. According to the African Development Bank, one of the largest shoe exporters in China set up a factory in Ethiopia as part of a plan to invest US$2 billion over 10 years in developing manufacturing clusters for export.
Similarly, South African and Taiwanese textile firms have looked towards Lesotho to avoid rising local input and labour costs. This focus on Lesotho as being an integral part of the fashion value chain has resulted in the apparel sector contributing 17 percent to Lesotho’s GDP.
According to Deloitte, Africa’s middle class has tripled over the past 30 years, and the current trend suggests that the African middle class will grow to 1.1 billion in 2060.
“This growing global middle class is driving a wave of consumerism for all types of goods, from mobile phones and televisions to fashion.
“When considering expansion, it is important to remember that each country in Africa is unique. Companies often make the mistake of moving into Africa with a ‘one size fits all’ approach.
According to market intelligence agency WARC, West Africans have an outlook closely aligned to the US, whereas East Africans tend to find Asian brands more appealing.
Understanding the differing cultures and brand preferences is therefore important when considering a retail expansion strategy,” adds Rahavendra.
“In order to maximise the opportunities offered to fashion retailers, suppliers need to know how to service markets with a supply chain that is agile enough to respond quickly to sudden or unexpected changes, flexible enough to customise products and efficient enough to protect margins,” concluded Rahavendra.
5 minutes with... Janthana Kaenprakhamroy, CEO, Tapoly
Founder and CEO of award-winning insurtech firm Tapoly, Janthana Kaenprakhamroy heads up Europe’s first on-demand insurance platform for the gig economy, winning industry awards, innovating in the digital insurance space, and leading with inclusivity.
Here, Business Chief talks to Janthana about her leadership style and skills.
What do you do, in a nutshell?
I’m founder and CEO of Tapoly, a digital MGA providing a full stack of commercial lines insurance specifically for SMEs and freelancers, as well as a SaaS solution to connect insurers with their distribution partners. We build bespoke, end-to-end platforms encompassing the whole customer journey, but can also integrate our APIs within existing systems. We were proud to win Insurance Provider of the Year at the British Small Business Awards 2018 and receive silver in the Insurtech category at the Efma & Accenture Innovation in Insurance Awards 2019.
How would you describe your leadership style?
I try to be as inclusive a leader as possible. I’m committed to creating space for everyone to shine. Many of the roles at Tapoly are performed by women and I speak at industry events to encourage more people to get involved in insurance/insurtech. Similarly, I always try to maintain a growth mindset. I think it’s important to retain values to support learning and development, like reliability, working hard and punctuality.
What’s the best leadership advice you’ve received?
Build your network and seek advice. As a leader, you need smart people around you to help you grow your business. It’s not about personally being the best, but being able to find resources and get help where needed.
How do you see leadership changing in a COVID world?
I think the pandemic has proven the importance of inclusive leadership so that everyone feels supported and valued. It’s also shown the importance of being flexible as a leader. We’ve had to remain adaptable to continue delivering high levels of customer service. This flexibility has also been important when supporting employees as everyone has had individual pressures to deal with during this time. Leaders should continue to embed this flexibility within their organisations moving forward.
They say ‘from every crisis comes opportunity’, what opportunities do you see?
The past year has been challenging, but it has also proven the importance of digital transformation in insurance. When working from home was required, it was much harder for insurers to adjust who had not embedded technology within their operating processes because they did not have data stored in the cloud and it caused communication delays with concerned customers at a time when this communication should have been a priority, which ultimately impacts the level of customer satisfaction. This demonstrates the importance of what we are trying to achieve at Tapoly in driving digitalisation in insurance and making communication between insurers and distribution partners seamless.
What advice would you give to your younger self just starting out in the industry?
Start sooner, don’t be afraid to take (calculated) risks and make sure you raise enough money to get you through the initial seed stage.