 "Growth spurt for branded apparel")
Driven by the growing online retailing market, the share of branded products in the readymade garment segment is set to rise to 46-48 per cent in the 2019 calendar year, from 35 per cent in 2014, says the latest report by Edel Invest Research of Edelweiss, the financial services group. The report suggests the mega trend of growing e-commerce penetration, along with innovation disruption created by fast fashion, changing consumer trends and preferences, are set to drive growth of the branded apparel industry. Some of the big entities in this area are Siyaram Silk, KKCL, Indian Terrain, Arvind and Madura Fashion.
According to Vinay Khattar, research head at Edelweiss Financial Services, the country’s apparel industry’s growth story is set to gain more heft by the entry of marquee global brands, sharpening focus of big domestic business houses and the online revolution started by e-commerce entities.
“We estimate branded apparel to clock a 10-12 per cent compounded annual growth rate (CAGR) over 2014-19, driven by a jump in volumes and realisations,” it states.
Saturation of available retail space and infrastructure and operational challenges, coupled with a rising internet penetration and jump in the number of Indians owning an internet-enabled smartphone, has led to most retailers looking at avenues such as e-commerce. This platform offers consumers attractive discounts on good quality and trendy products, a larger bouquet of products and brands to chose from, the convenience of cash on delivery and ease in returning of products.
“The online retailing market is expected to grow to $44 billion (Rs 2.9 lakh crore) by 2018, as against $13 bn (Rs 87,000 crore) in 2014, with apparel being one of the biggest beneficiaries — it already has 31 per cent of the online retail presence. E-commerce also helps e-tailers in real-time consumer data analytics. These involve identifying consumer trends, which are then combined with other indicators such as income levels to devise customised offerings helping e-tailers capture the latest trends, accurately target customers and continuously innovate to stay ahead of competition,” the report states.
The other prominent trend for a boost to the branded apparel segment are changing consumer preferences, along with ‘fast fashion’. Many new trends are apparent. For instance, the rising demand for readymade garments is replacing stitching of clothes. Also, price sensitivity has been replaced by quality, brand recall and aesthetics, said Khattar.
A younger and fashion-conscious population, higher comfort level in Western wear, entry of foreign brands and higher penetration of organised retailing are driving a preference for casual Western wear.
The Indian middle class, traditionally less fashion and brand conscious, has become fashion savvy and developed strong brand loyalties.
And, fast fashion, which implies quickly capturing the latest fashion and catwalk trends, replicating these in a retail format, has caught the fancy of consumers as well.
“Fast fashion requires an efficient supply chain and quick & inexpensive designing and manufacturing. This philosophy of quick and outsourced manufacturing, replicating the latest designs at affordable prices, with a short shelf life, is used by some of the biggest and most successful international apparel brands such as H&M and Zara. As new products are launched every week, existing products have a short shelf life, inducing shoppers to visit stores often, generating higher volumes. As the inventory is fast moving, the need to discount products to clear out stock is low, keeping margins stable,” the report observes.
According to Vinay Khattar, research head at Edelweiss Financial Services, the country’s apparel industry’s growth story is set to gain more heft by the entry of marquee global brands, sharpening focus of big domestic business houses and the online revolution started by e-commerce entities.
“We estimate branded apparel to clock a 10-12 per cent compounded annual growth rate (CAGR) over 2014-19, driven by a jump in volumes and realisations,” it states.
Saturation of available retail space and infrastructure and operational challenges, coupled with a rising internet penetration and jump in the number of Indians owning an internet-enabled smartphone, has led to most retailers looking at avenues such as e-commerce. This platform offers consumers attractive discounts on good quality and trendy products, a larger bouquet of products and brands to chose from, the convenience of cash on delivery and ease in returning of products.
“The online retailing market is expected to grow to $44 billion (Rs 2.9 lakh crore) by 2018, as against $13 bn (Rs 87,000 crore) in 2014, with apparel being one of the biggest beneficiaries — it already has 31 per cent of the online retail presence. E-commerce also helps e-tailers in real-time consumer data analytics. These involve identifying consumer trends, which are then combined with other indicators such as income levels to devise customised offerings helping e-tailers capture the latest trends, accurately target customers and continuously innovate to stay ahead of competition,” the report states.
The other prominent trend for a boost to the branded apparel segment are changing consumer preferences, along with ‘fast fashion’. Many new trends are apparent. For instance, the rising demand for readymade garments is replacing stitching of clothes. Also, price sensitivity has been replaced by quality, brand recall and aesthetics, said Khattar.
A younger and fashion-conscious population, higher comfort level in Western wear, entry of foreign brands and higher penetration of organised retailing are driving a preference for casual Western wear.
The Indian middle class, traditionally less fashion and brand conscious, has become fashion savvy and developed strong brand loyalties.
And, fast fashion, which implies quickly capturing the latest fashion and catwalk trends, replicating these in a retail format, has caught the fancy of consumers as well.
“Fast fashion requires an efficient supply chain and quick & inexpensive designing and manufacturing. This philosophy of quick and outsourced manufacturing, replicating the latest designs at affordable prices, with a short shelf life, is used by some of the biggest and most successful international apparel brands such as H&M and Zara. As new products are launched every week, existing products have a short shelf life, inducing shoppers to visit stores often, generating higher volumes. As the inventory is fast moving, the need to discount products to clear out stock is low, keeping margins stable,” the report observes.