This story has its origins in Haarlem, not the one in New York, but the original Haarlem, a mere 15-minute train ride from busy Amsterdam. It is the home of Dutch retail brand Claesen’s, which has witnessed meteoric growth in Europe and the US since its humble beginnings in 1993.
When 26-year-old Nayanika Pawar, an MBA student from the TIAS College of Business in The Netherlands, met Gerard Den Boer, the founder of Claesen’s, over a cup of coffee, she made an inspired pitch to take the Claesen’s brand to India. Gerard saw something special in the young Nayanika, and offered her an internship at Claesen’s. She did a stint at the headquarters and then flew home to India to study the retail market and conceptualise the business. Nayanika reflects, “It was one of the things on my wishlist: to take a global brand back to India where the real action is – India being an emerging market.”
Gerard backed Nayanika’s dream and gave her free reign with devising the go-to-market strategy, deciding the product line and product mix, and developing the brand strategy. However, she had to start from scratch and had to do it single-handed. She started the Indian arm of the company in April, 2013, and put her heart and soul into it. Even though she was on a shoe-string budget, the Claesen’s business in India was up and running in five months. Since then, it has been scaling year-on-year, and the brand is available all across India.
Market Size and Product Lines
According to Nayanika, “We are the first international brand in the kids’ innerwear category to have entered the market seriously. We’ve mapped the organised sector in Kids’ innerwear to be about Rs. 500 crore. We are looking at a 10 per cent market share in the next two years. The opportunity is huge; India has 300 million kids and 60 per cent of the population is under 35. So the sky is the limit for everyday basics.” However, Nayanika also mentions that while the market size is encouraging, the dynamics are unpredictable due to the boom in online sales.
Claesen’s product lines span kids’ innerwear, loungewear, and sleepwear (and now they are also launching men’s innerwear). Their products offer great value: their USP is ‘Dutch quality craftsmanship at Indian prices.’ They are also considering launching some product lines from their international basket of products; their idea is to keep adding new lines and categories every season.Company structure and manufacturing
The Indian company has been set up as an independent company called Claesen’s Fashions Pvt. Ltd.; Gerard and Nayanika are the directors of the company. Claesen’s has its own manufacturing facility in Tirupur that caters to both the international and Indian businesses.
Although the Indian collection is an extension of the European line, they have adapted it to suit the Indian market in terms of colours and pricing.
Marketing strategy and sales
Claesen’s has the huge advantage of having an international quality product and international brand name. However, in a new market, if the marketing strategy is not right, establishing the brand can become an expensive and time-consuming effort. Nayanika concentrated on the pricing model for India and then laid great emphasis on distribution. Once she found a sufficient number of distributors in all the major markets in India, she placed in-store promoters to bolster sales efforts. This strategy seems to have worked and sales have been increasing quarter-on-quarter.
Claesen’s already has around 250 points of sale in India and this is managed by a skeletal team. The big retailers have all come onboard: Landmark, Lifestyle, Central, Brand Factory, Hypercity, Lulu Mall, Partha’s and Metro Cash & Carry. Online giants Amazon, Myntra, and Flipkart are also stocking the brand.
The competition in the organised Kids’ innerwear category is somewhat limited. In India, it is mainly Jockey. Internationally, though, Claesen’s competes with Petit Bateau, Calvin Klein and Hanro.
Claesen’s is expecting to cross Rs 10 crore in the 2015-16 financial year. They have 110 employees across India. They have an ambitious target of Rs. 100 crores in the next five years: there will be planned capital infusions when strategic milestones are achieved towards achieving this goal. Nayanika has hired her mother, Anita, who has over 20 years of retail experience with Lee/Wrangler, Arrow and Enamor to head Sales.
Nayanika says that both her parents are her greatest inspirations. They are strong-willed, driven and hardworking. Her father, Commander Shahaji Pawar served in The Indian Navy as a Submariner for 20 years and retired to head infrastructure projects for TCS and ICICI. Nayanika learnt the retail business from her mother when she was growing up. In her own words, “My parents are natural born risk-takers and always pushed me to dream big. Both my mentors, past (mother) and current (Gerard) are fierce entrepreneurs, so I get a total kick out of testing new waters and I’m unafraid of responsibility.”
Nayanika’s views on entrepreneurship
“Because of the inherent duality in the path I have chosen, the pain and pleasure of freedom and the heavy burden that comes along with it, you feel extremely lonely at times. You have everyone: clients, vendors, and investors always pointing the gun at you for solutions. But it’s been worth it. And you develop your own style and values along the way. There is no formula, you’ve got to find your own solutions and what’s right for the organisation”, says Nayanika.
Where to next?
Nayanika is focussed on her short-term goal of making Claesen’s a ubiquitous brand in India. She wants rapid growth, but wants to keep the company “lean and mean”. She also wants to break a couple of stereotypes along the way. The first, that it is possible to build a brand in a chaotic market like India without blowing up billions on marketing and branding. Second, a woman can run a hosiery business!
She has a few other aspirations: she wants to get better at yoga; and retire at 40 and go camping! Well, when one starts young, no dream is big enough, and Nayanika seems to have the right focus and spirit to chase them all down.