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Denim cos to cut tailor workforce for Gen Y

December 31, 2009 02:58 IST

"Denim is one of the world's oldest fabrics, yet it remains eternally young," declared an American Fabrics magazine writer in 1969. This Levi Strauss & Co post on its website reflects what Indian denim producers intend to do -- let the Generation Y tailor the pair of jeans for the market.

Arvind Limited, one of the largest manufacturers of denim in India, plans to reduce the average age of its workforce to 32 years, from 37.5, over the few years. Mafatlal Denim has for some time been eyeing a younger crowd on its premises. "The company has brought down the average age of its employees to early 30s from late 30s," Rajiv Dayal, 53-year-old chief executive of Mafatlal Denim, informed Business Standard.

Shobhit Tyagi, the 40-year-old human resource head (Corporate and Denim) of Arvind Limited, explains that the move originated from the company's strategy to tap the young consumer. "A younger workforce can help us come up with better marketing strategies around the product. Denim has traditionally been the youth's product. Hence, we see a need to market it effectively for them, which can be done only if those strategising it are themselves young."

It's not surprising why denim companies have suddenly jumped on to the 'young workforce' bandwagon. While denim jackets, bags and accessories are available in the market, a pair of blue jeans continues to be the fabric's youth icon; something which is a must-have in the wardrobe of every young consumer. What's encouraging is that more and more consumers are moving up the brand ladder.

Leading brand consultants say the move to induct a younger workforce could be influenced by the fact that there is very little differentiation in a product that ranges from Rs 350 on the lower side to upwards of Rs 5,000 in the super premium segment.

"Take five brands of jeans, rip their tags and you won't be able to tell the difference," says 45-year-old Rajesh Dudeja, founder of Denim Club of India.

"Denim has been around in India for the last 30 years and we have only been seen as an export destination. While countries like the US have invested in design, we have blindly copied it without understanding the needs of the domestic market. The latest strategy could be a way for companies to re-establish the bond with their target consumers," he adds.

The denim industry in terms of fabric production is as big as 600 million metres per annum and is valued at Rs 8,000 crore in India, with nearly 60 per cent of it occupied by the unorganised market. It is this huge potential that is now leading players like Arvind, KG Denim, Aarvee Denim, Raymonds and Mafatlal to make more efforts to reach out to the young consumers.

Harish Bijoor, 45-year-old CEO of Harish Bijoor Consults, says the move is a good way for the companies to emote better with a product they want to sell to the end-customer. "You are able to put more care into the product. A brand manager of an ice-cream brand cannot be a diabetic," he explains.

Dudeja points to the huge discrepancy in the profile of the person who manufactures the product and the final customer. "Majority of the workers who manufacture denim products have never been to a mall. They live inside the four walls of their factory and have no idea how big their product is." Perhaps, it is this disconnect that the denim companies are looking to change.

According to some brand consultants, the move to employ younger people may be a step towards changing their corporate identity. "By making their workforce young, these companies might be sending out a message to their target audience that they are organisations that understand their consumers. From saying it is Wrangler and Lee jeans, it now makes sense to say 'denim from Arvind'. That way, the consumers tend to view the company as young and contemporary like them," says Atul Tandan, 62-year-old academician and management consultant.

But, not everybody is all enthusiastic about it. Ashish Shah, managing director of Aarvee Denims & Exports Limited believes not all sections of the workforce can be filled with young people. "To make such recruitments more effective, it would make sense to bring down the average age of executives and department heads, whereas experienced employees would be required at the shop floor and other sections," Shah argues. Similar was the opinion of Deepak Chiripal, chief executive officer of Nandan Exim, who doesn't know "how having a younger workforce would really help in marketing denim products or designing them".

Denim, however, has been viewed primarily as a commodity. Nevertheless, Tandan says the shift has begun in denim from being commodity-driven to brand-driven. "Consumption economies across the world are being driven by young people and India is no exception. Youths are driven by brands. Which is why, while so far denim was viewed as a commodity, companies are making efforts in recent times to showcase it as a lifestyle product. Over the years, denim has acquired a fashion statement so much so that even Barack Obama attends White House meetings in denim jeans and blazers, not to mention several CEOs in India," he adds.

Bijoor has a word of concern. "It looks like an excuse to lay off older people. Hiring younger and less experienced people could be cost-saving."

Vinay Umarji and Archana M Prasanna in Ahmedabad/Bangalore