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What you wear says a lot about who you are as a person. Your choice of clothing reflects your personality and the image you want to project to the world. That's why consumers are willing to pay more for brand name clothing.
But what about what's underneath? Do people care as much about their underwear?
Up until the 1990s, underwear was a highly commoditized market in India and people didn't give much thought to what brand of underwear they were buying. But Jockey changed all that by building an aspirational brand in the underwear industry.
Page Industries, the exclusive licensee of Jockey in India, made ~INR 3725 crores[1] in revenue in India. That’s the same as the combined revenue of its two largest competitors, Lux (~INR 2295 crores[2]) & Rupa (~INR 1474 crores[3])!
So, how did Page Industries change India’s perception towards underwear and create an elite brand, and a hugely successful business?
Well, let’s find out!
Firstly, a quick glance at the underwear industry in India (pre-Jockey)
Before the 1990s, if you went underwear shopping, the local shopkeeper would probably just ask for your size and then fetch a box from some corner of the shop.
After shuffling through the stack of products inside the box, he’d pick an item and hand it over to you. The shopkeeper would choose the right brand or product for you, and you’d blindly trust their choice.
This item itself came packed in a flimsy, transparent plastic cover. Which was again put in a separate plastic bag for you to carry. You’d quickly pay for the item and leave the shop.
In essence, underwear shopping used to be a hush-hush affair, clouded with embarrassment. More so for women.
There were multiple brands in the market, and most of them operated in the low-end segment. Underwear was produced and sold in mass.
Surprisingly, textile clusters in places like Tirupur in Tamil Nadu were famous for their hosiery and knitwear exports. Yet, underwear was considered a strictly functional product and no one even remotely imagined making a fashionable brand out of it.
In such a scenario, Page Industries started its operations in 1995 and soon changed the rules of the game.
How it all began for Page Industries
Jockey was founded way back in 1876. But, they became wildly popular in the US in 1934 for their shorts, with a Y-shaped fly.
Around the same time, the Genomal family of Indian origin & settled in the Philippines had started a business to import clothes and sell them locally. They soon realized that their highest selling product was Jockey underwear and thus began a long-term partnership between Jockey & the Genomal family.
First entry into India
Now, Jockey’s first attempt to enter India was through a partnership with Associated Apparels in 1962. Associated Apparels had the license for multiple brands at the time, and Jockey always got a fraction of attention from them.
In 1973, when the Indian government forced foreign companies to dilute their stake to 40% or less, Jockey called it quits and left India.
Re-entering with a trusted partner
But, things took a turn for the better with liberalization in India in 1991. And, Jockey decided to jump back into the Indian market. This time though, Jockey approached their trusted partner in Asia, the Genomal family, to take charge for them in India.
While the Genomal family had Indian origins, they had never done business in India and were hesitant to take up Jockey’s offer.
But Jockey was keen to partner only with the Genomal family because:
- They had a longstanding work relationship and trusted each other.
- More importantly, Jockey was sure that they would get preferential treatment from the Genomal family, unlike their past experience with Associated Apparels.
- And finally, the Genomal family had shown that they were ready to experiment & make bold moves. This was particularly critical for Jockey, given their ambitious vision of creating an aspirational underwear brand.
Page Industries was thus founded in 1994. Interestingly, even today, Page Industries only has two brands under it, Jockey and Speedo, with Jockey bringing in ~98% revenue!
Clearly, Jockey’s bet on Genomal family giving them undivided attention played out really well 😉
Bringing underwear from the store-room to the store-front
Given Jockey and the Genomal family were aligned on the vision, Page Industries made bold moves in 4 key areas that changed the game entirely[4].
A) Product
In-house manufacturing
During 1990-2000, the underwear industry was dominated by mass players like Rupa, Lux, Maxwell. They primarily sold low-end, low-price products and didn’t require attention to detail. So, their products were mass produced and the manufacturing was majorly outsourced.
On the contrary, Page Industries was particular about having control over manufacturing and consequently, product quality. So, they built in-house manufacturing facilities and till date, ~95% of products are manufactured in their own factories.
Obsessed over quality
Page Industries placed an almost obsessive focus on product quality right from the start. It also helped that the Genomal family had a history of over 50 years with Jockey prior to Page Industries. So they knew the systems & processes in and out. Plus, they also had access to the latest technology and R&D at Jockey.
New products & variants
On top of this, Page has constantly launched new products & variants at a rapid pace. For instance, they refresh their product range for new designs or colors every 3 months.
B) Place or Where the products are sold
In-store advertising
Right from the start, Page was clear that they had to radically change the way underwear shopping is done in India. For that to happen, Jockey underwear had to get prime space at the store and not some corner in the store-room.
Page laid excessive focus on in-store advertising, and ensured that Jockey got the bulk of the in-store promotional space.
Exclusive brand distributors
To ensure flawless execution, Jockey partnered exclusively with brand distributors who work with and push only a single brand at the stores. On the contrary, competitors like Rupa & VIP partnered with wholesalers, who work with multiple brands at a time leaving little to no control of in-store execution with the brands.
Exclusive brand outlets
Additionally, Page was the first company in the underwear category to have exclusive brand outlets or EBOs.
Imagine talking to someone about a store dedicated to selling underwear in the 1990s, when buying underwear was almost a taboo. People would laugh off such an idea or may even get offended!
Today, Page Industries has ~1000 exclusive Jockey outlets across India[5]!
C) Promotion or Messaging
Western = Aspirational
Jockey had launched in India post liberalization and at the time, people had just got access to international brands. Anything western or international was considered premium and had a natural aspirational value attached to it.
Page played very well on this sentiment and ensured that people perceived Jockey as a premium, foreign brand. The advertisements, posters, models, and every aspect of the brand was loudly western. In fact, they hired caucasian models for all their ads!
D) Pricing
Premium pricing
The premium messaging that Page desired for Jockey, had to be reflected in the pricing as well. So, Page consciously priced their products in the sub-premium to premium range.
No discount policy!
Additionally, Page also avoided offering any discounts on its products. In a country like India where people obsess over offers & discounts, this move is literally unthinkable!
But till date, Page works with its “no discount” policy and strictly monitors the network to ensure it is executed properly. As a result, over 90% of Jockey products across retailers in India are sold at the maximum retail price or MRP!
Together, these things helped Page buildd a premium and aspirational brand for Jockey.
Marketing gurus would call this as an excellent example of applying the 4Ps framework. But, we don’t believe Page thought about such a framework before deciding their next steps in India.
We have ourselves categorized it into 4Ps just because it’s easy to structure & explain. So, when you’re solving a business problem, don’t think in terms of applying frameworks. Rather, think in first principles and just apply your basic problem-solving skills :)
So, what was the result?
It’s a well-known fact now that Jockey has been hugely successful in creating an aspirational underwear brand that it set out to buildd.
But as you know, we’re not satisfied unless the numbers tell us the same story. So, let’s dive into some numbers for Page & Jockey in India!
- Page Industries currently has ~50% market share in the underwear category[5]!
- In 2000, Rupa made a revenue of INR 100 Cr, while Jockey was at INR 21 Cr.Fast forward to 2022, Jockey at ~INR 3725 Cr now makes 2.5x the revenue of Rupa (~INR 1474 Cr)!
- Jockey is also completely debt-free, and has a healthy ROCE of ~64%[6], which is 2.2x that of Rupa (~28%[7]).
The curious case of ROCE
I am sure you’d be wondering what in the world is ROCE, and why is it so significant.
Well, let me explain.
ROCE stands for Return on Capital Employed, and it indicates how well a company is using its capital to generate profit.
A company’s capital is simply the investment needed for the business to function. It is the total of fixed assets and working capital, so it includes cash, machinery, property etc.
Now, ROCE is significant because it helps us compare profitability across companies based on how efficiently they use the capital available to them.
For instance, if two companies A and B make Rs. 100 in profits each, but A uses a capital of Rs. 500 and B uses a capital of Rs. 1000. Then, A has a higher ROCE compared to B, and is therefore more efficient in using its capital.
But, how is Page able to ace ROCE?
Right from the start, Page has been very particular about where they invest their capital.
Cutting costs
In 1995, Page only had a total capital of INR 1 crores available. So, they employed cost-cutting measures like leasing land instead of purchasing, outsourcing specific manufacturing processes that are expensive and strictly limiting the amount of debt they take on. All of these initiatives were primarily aligned with the objective of having a healthy ROCE.
High ROCE projects
More importantly, they have been particular about picking up only the projects related to their core business, and only if they are sure they can get an ROCE of >20%. That’s why Page never expanded beyond Jockey and Speedo in their portfolio of brands.
As a result, Page has consistently increased their ROCE from ~25% in 2008 to ~64% in 2022 and maintained a financially healthy company throughout. The consistency & growth of ROCE over the years has made Page a darling among Indian investors!
What’s next for Jockey in India?
Now that Page has successfully established a premium brand for Jockey in India in the underwear segment, the next goal for Page is to scale to $1 billion or ~INR 8000 crores in revenue — double of what it is today!
How Page plans to do that, you ask? Well, Page has its eyes on cracking the ‘Athleisure’ segment in the next 3-4 years and buildd-ing a brand for Jockey there.
Of course, it’s a herculean task given the intense competition, but such barriers didn’t stop Page even earlier 😉
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