Textile Market Offset to Expand at a Potent Pace Over 2028
In an interview with BW Businessworld, Vivek Ramachandran, CEO, Serai highlights his thoughts on the apparel industry, global supply chains, major manufacturing hubs in Asia, expansion plans, growth, buyer engagement and more. Excerpts:
1. Brief us about your business model like how did the idea came to start and how does it work (step by step procedure)?
HSBC was founded in 1865 with one key objective – facilitating international trade. Ever since, HSBC has used its global network to connect customers to opportunities around the world. However, despite tech-driven improvements in most areas of business, international trade remains as complex today as it was more than 150 years ago. To simplify trade, HSBC needed to look beyond banking. Serai was born from this insight and a big idea - a data powered platform to help businesses grow and connect globally. Founded in 2019, Serai is the digital B2B platform by HSBC that makes global trade easier for apparel businesses.
Serai’s digital B2B platform allows verified apparel buyers, brands, suppliers and manufacturers to easily search for and connect with each other. Companies can create a profile to showcase their products, services, facilities and credentials. Serai helps companies reduce time and money spent on sourcing for high quality suppliers. With Covid making international travel almost impossible, Serai makes it easy for brands and buyers to build relationships with suppliers and manufacturers globally.
This year, Serai also launched a Traceability solution which allows global apparel brands and manufacturers to trace and map their global supply chain from raw material to finished product. They can easily collect and manage data from their supply chain partners. Having all this information in one place can help them drive operational efficiencies, manage underlying risks and eventually achieve greater transparency and trust in their extended supply chain.
2. What are the unique key points of your company? How are you different from the existing competitors?
While there are similar platforms in the market, there are two aspects that set Serai apart. Firstly, we are only focused on the apparel industry which means that we have built a deep understanding of the industry’s pain points and challenges. The solutions we offer are a direct response to the conversations we’ve had with apparel companies. Secondly, while we are an agile start up that can move quickly to address our customers’ needs, being part of HSBC has helped us to establish credibility in the industry. HSBC has over a century’s worth of knowledge which benefits the work that we do with our clients.
3. What is the funding status and monetization model?
Serai is a subsidiary fully owned and funded by HSBC. Creating a profile on Serai is free. However, businesses can pay for premium services such as being promoted as a featured business on our platform or gaining access to data and analytics to help them further grow. Serai’s supply chain solutions, such as Traceability, also come at an added cost.
As we are a private company, we are unable to disclose revenue figures. However, companies interested in any of Serai’s solutions can get in touch here.
4. What challenges are you facing in running your business?
We have not faced major challenges but have certainly had to evolve our value proposition along the way. While our mission has always been to simply global trade through technology, our target audiences have evolved for our B2B digital platform. While we have apparel businesses of all sizes on the platform, we’ve seen more usage from the small and medium-sized companies. They may not have the sourcing network that a larger, more established brand would have, and so, have seen a lot of value from a platform like Serai’s. Hence, many of the features we’ve introduced recently are focused around helping them further. For example, we launched a request for quotation (RFQ) feature where brands and buyers can upload specific requests for manufacturers and suppliers to respond directly to.
Our Traceability solution is another example of something we built in response to industry requirements. It was initially developed to help a client who is a global manufacturer trace their supply chain but having seen such a positive response from the industry at large, we continue to build on the core offering, adding more modules aimed at helping apparel companies achieve supply chain sustainability.
5. How has been the people`s response so far?
We’ve been fortunate to see tremendous success in businesses embracing our platform. We were established at the end of 2019 and have had over 8300 companies join our platform since then. Close to 62% are sellers and manufacturers, while the rest are buyers and brands. We are growing at 20% MoM in companies joining our platform.
We have members from over 100 countries with the top geographies being India, UK, Bangladesh, USA and Australia.
6. What are the traction details (like customers, website visits, orders, growth in business past few years & other achievements of the company)?
With the first Indian company joining in February last year, Serai has seen huge growth over the last year. There are over 2000 Indian brands, suppliers and manufacturers on the platform today, including leading manufacturers such as Shivalik Prints, Radnik Exports and Indian Designs. This year alone, Serai has seen a QOQ 23% increase in Indian apparel businesses joining the platform, the largest contributor to Serai’s customer base. Serai currently has over 7000 companies on its platform from over 100 countries including India, UK, Bangladesh, Sri Lanka, USA and Australia. About 62% are suppliers and manufacturers, while 38% are buyers and brands primarily from the US, UK and Australia. The company has seen strong buyer engagement, with over 1700 brands and retailers joining Serai in the last six months.
7. How do you look at expansion?
Our expansion strategy is aligned with market demand. Most of our business is centred around countries which are major apparel hubs. Being headquartered in Hong Kong, it was a natural focus in the beginning. While it still is, we’ve branched out to Bangladesh and India as there are two major manufacturing hubs in Asia. Over in the West, we’ve focused on the US and the UK as many major apparel brands are based there. We will continue to monitor trends in trade corridors as we prioritise market expansion
8. What are your marketing plans?
At Serai, we take an integrated approach to our marketing strategy. While we’re a global company, we believe it’s incredibly important to localise our marketing for our target markets. This is especially pertinent for a diverse region like Asia Pacific, where we have to cater to various languages, cultures and audience preferences.
Our marketing mix comprises digital and offline activities aimed at increasing brand awareness and customer acquisition including paid ads on major social media and search platforms, events and media engagement. Events have played a huge part in increasing our brand awareness. We’ve taken part in major industry conferences and organised our own webinars. In India, for example, we ran a webinar on how Indian apparel businesses can grow through digitisation earlier this year. We’re currently looking at participating in upcoming trade conferences in India.
9. What has been the biggest learnings so far?
The apparel industry is one that is very traditional and opaque. We realised at the beginning that a lot of companies rely on traditional methods of sourcing and connecting with companies. There was a low digital quotient across the industry. We’ve seen this slowly change, though, with more companies embracing digitisation. We work closely with many of our MSME clients in helping them create strong digital profiles on our platform and making meaningful connections to help grow their business. There is definitely an appetite for them to improve which is heartening.
10. What is the market size and opportunity?
Serai’s currently focuses on the apparel, textile and fabrics industries. While we are unable to share Serai’s market share, the global textile market size is anticipated to reach USD 1412.5 billion by 2028, according to a new report by Grand View Research Inc. The market is expected to expand at a CAGR of 4.4% from 2021 to 2028. Asia Pacific is also set to rebound faster from Covid, with China, Japan and India dominating the top five apparel markets in the world.
We’ve seen more innovation in the industry in the last few years and hope that this trajectory continues. There is huge potential for companies like Serai to collaborate with industry leaders to continue producing solutions aimed at disrupting the industry.
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