the innovation issue – FRONTIER IN CLOTHING: HEALTH & ENVIRONMENTAL CONSCIOUSNESS
REVENUE: $1.6 BILLION
FRONTIER IN CLOTHING: HEALTH & ENVIRONMENTAL CONSCIOUSNESS
Fashion is fickle, but when people buy clothes, there are other factors that weigh in, too. They seek comfort, clothes produced in sustainable factories, versatility and wellness–all growth areas generating high-margin orders for MAS Holdings, a family controlled manufacturer of clothing.
“People are more curated in what they buy. Health, wellness and the environment matter to people far more now. This is an opportunity for clothing manufacturers to add value,” explains MAS’s Chief Growth Officer Nathan Sivagananathan.
MAS, which established a niche for itself designing and stitching lingerie for Victoria’s Secret and making sportswear for major global brands, now has a team tracking global consumer trends and scouting technology in electronics and internet of things that are useful embedded into clothing. The company is developing clothing with sensors that track muscles. The sensors generate early warnings on wear and tear to athletes, or older people, if they’re overworking any part of the body. “We’re working on clothing that will generate a lot more insightful data about a person’s health, not just heart rates like most wearable tech companies are doing,” Sivagananathan says.
AS is tapping into open innovation to generate ideas and source technology externally. “We don’t build everything,” he says.
MAS has invested in several global startups, including four that were recently featured on Fast Company, a US magazine covering business and innovation. Thinx has launched a cultural revolution in the US with its menstrual leaks-free lingerie; Wearable Experiments is taking wearable tech beyond the wrist and working on an entire smart wardrobe; Athos makes exercise clothing that monitors the heart rate and keeps an eye on cheats by counting the number of reps; and Wiive makes insoles.
Deploying technology has its challenges. Electronics and water don’t mix, so MAS is finding solutions for this. Another challenge is ensuring that clothing with sensors drape well. Many companies mistake innovation for R&D, but it’s about recreating a business model that adds value, Sivagananathan says. According to WGSN, a company that makes fashion forecasts, people are willing to pay a premium for value and sustainability. They’re also buying clothes that are durable and versatile—a casual dress yet elegant enough for a formal dinner is a keeper.
MAS is known for its green manufacturing plants in Sri Lanka, Indonesia and Vietnam. The company is also developing sustainable products like reusable tampons to limit waste. “Eight billion tampons are thrown away each year in the US alone,” Sivagananathan says.
“Globally, the clothing export industry is mainly led by brand owners, and this is a challenge,” he says. Brands dictate what clothing manufacturers produce and are constantly squeezing margins. But, MAS is breaking that mould. “Instead of making garments, we are adding value across the value chain – from the fashion designs, to the fabrics and the final product.”
STANDARD CLOTHING SIZES COMING APART AT THE SEAMS
Consumers are demanding that clothes fit and feel just right as their conscientiousness about their clothing purchases on grounds of health and environment grows.
“In the future, our production volume may remain correlated to population growth. However, variations in size will increase,” according to MAS Holdings’ Nathan Sivagananathan. “This will push up costs, unless we use automation to neutralize the impact.”
Clothes come in standard sizes. The same medium-sized t-shirt may generally fit two people with similar collar sizes, but a six-footer will find it’s too short to tuck under his/her jeans and someone else may find it’s too long. “Consumers are not having any of this, they want a perfect fit and to look good too,” Sivagananathan says.
MAS has invested in technology and adopted lean manufacturing to achieve speed and lower costs. It’s even invested in overseas facilities, particularly fabric mills, to benefit from scale and proximity to suppliers. “This is an important part of our business. We churn a lot of data about manufacturing and consumer behavior, and we spot and understand market trends early. That’s what makes us successful,” he says. Cost pressure is rising due to growing demand for clothes that fit perfectly and shrinking turnaround times due to fashion retailers wanting small batches delivered on time, so automation and manufacturing closer to the end consumer makes more and more sense. Automobiles, electronics and other industries have all automated production lines. However, the apparel industry’s reliance on labour remains fundamentally unchanged since seamstresses threaded their needles a thousand years ago. Over the last few decades, clothing makers relocated production from country to country searching for low-cost labour.
“MAS doesn’t chase labour,” Sivagananathan says.
The company employs around 79,000 workers in 14 countries, and the role of its chief growth officers includes exploring ways to automate apparel manufacturing. “We’ve invested in plants in North and Central America (North Carolina in the US, Haiti and Honduras), which we intend to automate to a high degree,” he says.
However, fully automating production may take a while. Machinery manufacturers, their suppliers and related service providers need time to build expertise and mature.
CAPTURING AN ONLINE MARKET AND STEADY REVENUE FLOWS
oDoc, a startup for on-demand mobile doctor consultations via video, has partnered several large companies like clothing manufacturers MAS and Hela to trial its platform before a public launch: it’s a market grabbing strategy which can potentially generate steady revenue flows to avoid the fluctuations of per-visit earning models.
oDoc is trying to solve a simple problem, reducing the time and money getting in front of a doctor. According to the American Medical Association, video consultation could effectively handle nearly 75% of all regular doctor visits. “It should be the same figure for Sri Lanka,” a spokesperson for the startup says.
The oDoc app which can be used on Apple and Android devices allows users to select a doctor of their choice and appointment time for an incoming video call. Patients can upload medical reports, notes and images before the consultation so doctors can prepare. The platform can suggest diagnoses and recommend drugs and dosages for doctors to prescribe. oDoc will be linked with several online pharmacies to enable door-step medicine delivery. Patients can channel a doctor at around half the cost, save time, record their medical histories on the app, and choose whether or not other doctors they consult can access them.
The strategy to partner companies with a large number of employees is critical for two reasons. First, it’s allowing oDoc to test its app on a larger base giving it a better chance to identify a broad range of bugs that need fixing. Second, it’s capturing a large customer base at virtually no cost.
The business to business approach is the most efficient way to reach consumers. oDoc will benefit by not having to allocate large advertising budgets and could generate a steady revenue stream by way of membership fees that companies can pay to register staff on oDoc, thereby reducing dependence on fluctuating per-visit revenues. It is not clear if this is the startup’s strategy, but it’s an opportunity. Companies can benefit by reducing absenteeism and improved productivity as workers can consult a doctor on their own terms, and they will have better privacy to deal with health problems like depression and STDs that are stigmatized and under treated.