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Like the 250 stores that Apex operates in its home market of Bangladesh, there’s a strong focus on customer service. But notably, the Nepal store trades under a different name – Venturini – and features a slightly different product mix suited to the colder climate.
While the Apex name is synonymous with shoes in Bangladesh, where the company’s founder and chairman Syed Manzur Elahi is a well-known businessman and philanthropist, that’s not the case in Nepal.
Venturini, a small Italian shoe brand that Apex acquired some years ago, has more potential to become a recognisable name, according to Pillai.
“Since it is our first store, we are going to do a lot of R&D here to understand what we need to change and what we should continue doing,” he said.
This is important because Apex plans to open more Venturini stores in Nepal next year before ultimately expanding throughout the region and – eventually – the world.
Global expansion plans
“We want to take on Southeast Asia, and then go into the Middle East and Africa,” Pillai said. “We don’t want to spread ourselves too thin, so we’re starting with markets that are near to us first.”
Besides Nepal, India is another nearby market that Apex has on its radar. The retailer currently has 53 points of sale in India, including Amazon, Shoppers Stop and Regal Shoes, and it plans to open standalone stores in the near future.
To help tailor the offering to each new market it enters, Apex will work with franchisees who understand the local customers and trends.
This isn’t entirely new territory for Apex. In Bangladesh, it works with around 200 franchisees, which operate smaller stores in the interior of the country targeted at a mid-market consumer.
The stores Apex operates itself are larger side and cater to a more premium customer. It recently opened a 23,000-square-foot store in Bangladesh, which it claims is the biggest store in Southeast Asia. However, its average store is around 2,000 square feet.
The company also works with nearly 200 local distributors, which sell flip-flops and other budget-friendly styles.
Apex is one of the few footwear businesses in the world that sells shoes at every price point, from 50-cent sandals to $300 bespoke leather brogues.
From manufacturing to retail
Starting as a leather tannery in 1975, Apex ventured into shoe manufacturing in 1990. Initially, the company produced shoes for export only, but in 1997, it built a second factory dedicated to the domestic market and over the past 23 years, it built up the retail side of the business.
Still, Apex remains a dominant player in footwear manufacturing, counting iconic US department store chain Macy’s, European online fashion giant Zalando and Japanese chain ABC-Mart among its clients.
And it’s the company’s manufacturing arm that has the potential to give it a competitive advantage as it enters new markets.
“What happens in today’s world is that a brand is only successful when the product is good. And that’s where we come in very, very strong,” Pillai said.
“It’s the quality, the finish. The USP is very different from what you get at that price. You can get a similar product at three times the price in Europe, but I can give it to you for three times less because it’s made in our factory. That’s the advantage we have.”
It’s not uncommon for manufacturers to venture in retail, especially in markets like Bangladesh where there’s a growing middle class and appetite for fashion products. But many manufacturers don’t approach retail with the right mindset, according to Pillai.
“In manufacturing, you get the money upfront and then you make the product and send it. Retail is all about experience. If you create an experience and offer a fantastic product, consumers will come to you, but it’s a waiting game,” he explained.
“In the long run, retail is more profitable because manufacturing is very cutthroat in terms of price. But in retail, if the customer likes the experience and likes your product, they’ll buy it. They’re not going to try to bargain with you on the price.”
From an operations standpoint, Apex keeps its manufacturing and retail businesses separate, and that has been key to its success, according to Pillai.
Experiential stores and digital investment
Like many retailers around the world, Apex is focused on making its stores more experiential and service-oriented. Several of its stores feature in-house cobblers and cafes where customers can enjoy a coffee and snack while they wait for their shoes to be repaired.
“Our aim is to bring everything under one umbrella because the consumer doesn’t have time anymore,” Pillai said.
At the same time, Apex is investing more into its digital business after seeing a rise in online shopping during Covid-19. While e-commerce still makes up a relatively small proportion of its total sales, the retailer is currently developing a click-and-collect solution that it hopes to roll out by the end of this year or the first quarter of next year.
“In Southeast Asia, we still like to go to shopping malls and to touch products. That’s going to change, but it will take more time,” Pillai said.
For him, the big opportunity in omnichannel is the potential to increase basket size when customers come into the store to collect their order.
With its global expansion and more sophisticated digital offer in the works, Apex is the embodiment of a new generation of Asian retailer that is ready to take its place on the world stage.
“The future is Southeast Asia,” Pillai said. “This is where the youth, the population, the middle class is growing. Those who are smart want to come to this part of the world.”