Our current strategic emphasis lies predominantly on emerging markets
Giordano International was founded in Hong Kong in 1981 and is now one of the world’s leading international retailers of men’s, women’s and children’s apparel and accessories. The brand has grown from its single Hong Kong store in 1981 to the present network of over 2,100 stores and counters in over 30 countries in Greater China, South Korea, Southeast Asia, Australia, India, Africa and the Gulf Cooperative Council. Mark Alan Loynd, Head of Overseas Market, Giordano International, in this interview with Divya Shetty, discusses the company’s expansion plans.
Can you give us a brief overview of Giordano.
We specialise in offering essential wardrobe staples and casual wear, setting ourselves apart through a steadfast commitment to unparalleled quality. Our pride in delivering superior products at a competitive price point distinguishes us within the market. Positioned as an aspirational brand, we transcend the realms of fast fashion and mass-market labels, carving a niche that falls between these categories and the luxury premium sector. Our target audience comprises university graduates and individuals embarking on their professional journey, seeking a brand that embodies both sophistication and attainability. In essence, we define ourselves as an aspirational brand, catering to discerning customers seeking elevated style and quality craftsmanship.
What is your perspective on the present state of the global apparel industry?
On a global scale, the entire retail industry has experienced significant challenges, particularly due to the profound impact of the COVID-19 pandemic. Notably, the fashion apparel sector has been among the most severely affected. Fortunately, our adept adoption of strategic measures has shielded us from the majority of these challenges. Even amidst the COVID-19 period, we strategically expanded our market presence, effectively navigating through these uncertain times. We capitalised on the opportunity to enter emerging markets, with a particular focus on various regions in Africa and the dynamic market of India. These ventures have proven to be highly promising, fostering our continued growth both during the pandemic and in its aftermath.
What are the current challenges faced by the apparel industry?
Certainly, competition remains a perennial concern in the dynamic business landscape, characterised by a saturation of players across various markets. To address this, our strategic focus extends towards emerging markets, recognising the need to navigate the challenges posed by an increasingly crowded space. Furthermore, the escalating costs of production present a significant hurdle, particularly amid the evolving dynamics of production bases. Our proactive response involves diversifying production across countries such as Vietnam, Bangladesh, India, and China, a departure from the erstwhile reliance on China.
Additionally, a critical factor in our sustained success is the recruitment, development, and retention of top-tier talent. In any industry, the acquisition and cultivation of skilled professionals are paramount. The competitive landscape sees a continual influx of companies vying for exceptional individuals, necessitating a concerted effort to attract and retain talent. Fostering a culture of talent development and retention emerges as a pivotal aspect of our on-going commitment to thrive amidst these challenges and foster sustainable growth.
With your company establishing a foothold in both the Asian market and the Middle East, could you elaborate on the distinctions between these regions concerning consumer preferences, cultural nuances, and related factors?
Giordano boasts a distinctive organisational ethos encapsulated in the philosophy of “think local, act global.” This principle underscores the existence of a foundational framework and overarching DNA, complemented by a significant degree of autonomy and latitude accorded to local teams across diverse markets. In regions such as the Middle East, South Korea, and Indonesia, we strategically position ourselves as a free premium brand. Conversely, in other markets, our local teams may opt for a slightly lower positioning, leveraging market dynamics to their advantage.
Notably, the Middle East and Asia present nuanced disparities that necessitate careful consideration, particularly in size specifications. Adhering to the 80:20 rule, a substantial 80 per cent of our products maintain a universal appeal transcending diverse markets. Simultaneously, a strategic 20 per cent allowance provides the flexibility for local teams to conceive and produce region-specific products attuned to local preferences.
In practice, this manifest as an adaptive approach wherein certain products cater to the unique fitting preferences prevalent in Asian markets, emphasising a slimmer silhouette, while in the Middle East, a preference for slightly looser fits is acknowledged. Moreover, distinctive regional preferences, such as a penchant for embroidery in the Middle East or a heightened emphasis on fabric and colours in Southeast Asia, are accommodated within this flexible framework.
These subtle differentiations within the 20 per cent allowance reflect the brand’s commitment to understanding and meeting the distinct demands of diverse markets. Nevertheless, a resounding 80 per cent uniformity across products underscores our identity as a global brand, delivering consistently high-quality, straightforward products that resonate with customers worldwide.
Given that Bangladesh and Vietnam boast lower labour costs, could you elaborate on the rationale behind selecting India as the preferred manufacturing unit?
Certainly, I believe the scope extends beyond labour costs when assessing our operational considerations. In conversations with stakeholders and fellow industry entities, there tends to be an emphasis on labour costs. However, for a company of our stature, the agility and adaptability of logistics constitute pivotal factors. Our evaluation extends beyond mere considerations of labour costs, encompassing factors such as factory quality, safety standards, and a comprehensive view of the operational landscape.
In the case of our company, Giordano, the nimbleness and flexibility inherent in our operations are contingent on an intricate evaluation of logistics. We scrutinise elements such as the efficiency of shipping processes and the expeditious dispatch of finished products. It is imperative for us to adopt a holistic perspective that goes beyond conventional considerations. In emerging markets like Bangladesh and India, the evolving cost competitiveness is paralleled by a maturing logistics network. This evolution facilitates a seamless turnaround of products and their swift delivery to respective markets.
For Giordano, a company renowned for its nimbleness and flexibility, every facet of our operations must align with these principles, including shipping and logistics. Therefore, our scrutiny extends beyond labour costs, encompassing the broader spectrum of logistical efficiency and adaptability.
Could you kindly elaborate on Giordano’s global expansion strategy?
Our current strategic emphasis lies predominantly on emerging markets. Looking ahead into the coming year or two, we anticipate India to persist as a pivotal growth market for Giordano, alongside the promising prospects presented by the African continent. Substantial progress and traction have been achieved in this region, establishing it as a significant driver for our expansion efforts.
While these emerging markets remain primary focal points, we also project sustained growth in traditionally robust markets such as the Middle East, with Indonesia continuing to represent an enticing prospect. Moreover, we remain vigilant about potential opportunities in other markets, contemplating potential forays into Central Asia and even more established Western markets.
In the short to medium term, our assessment positions the African continent as one of the most promising markets, alongside the continued growth trajectory of mature markets in Asia and the Middle East.
