Apparel exporters take domestic route

With the export market losing its sheen, a growing number of apparel exporters are drawing up strategies to sell their wares in the domestic market.

Almost ten companies have chalked up plans to sell locally including big names like Orient Craft and House of Pearls.

While Indian exporters find themselves out-priced in overseas markets, thanks to the rising rupee, the domestic ready-made apparel market has grown to Rs 45,000 crore and is expected to grow at 30 per cent per annum.

Analysts said that the higher local demand for branded apparel was because of rising purchasing power of consumers who were now spending 6-7 per cent of their disposable income on ready-made garments. The surge in consumer spending has resulted in a 20 per cent growth in demand for international apparel.

"Given the problems that our apparel exports are facing because of rupee appreciation and escalation in interest rates, entering the domestic retail market is a de-risking or hedging opportunity," said DK Nair, secretary general, Confederation of Indian Textile Industry.

House of Pearls, a leading Gurgaon-based exporter, has formed a joint venture with Lerros of Europe for the Indian market.

"With this tie-up, we will open 10 stores in the national capital region and gradually increase the number of stores to 300," Deepak Seth , House of Pearls chairman and managing director said, adding: "Through this network, we will also launch our brands DCC and Kool Hearts."

Orient Craft, which has laid off close to 1,000 workers recently to cope with dwindling export orders, has tied up with The Oswal Group, which had entered the retail market three years ago with a lingerie retail chain and is expanding its network from 21 stores to 120 stores.

"Looking at the change in the way women shop for their intimate wears in India, we are looking to grow as the dominant national brand with stores in each part of the country," said a company executive.

These companies are entering a market that already has several well-established brands like Pantaloons, Westside, Wills and Van Heusen, among others.

Some observers feel that the new entrants have a good chance of succeeding in the domestic market on account of their exposure to the world's top garment producers.

Vijay Agarwal, chairman, Apparel Export Promotion Council, said, "These apparel manufacturers have very well-organised factories. Since these exporters have this advantage, they are expanding in Indian retail space and the rupee appreciation has expedited this process."

Sudhir Dhingra, the chairman and managing director of Orient Craft said the company had analysed the Indian consumer's desire for imported apparel before making this foray. He said that Indian consumers were brand conscious and accordingly the company was positioning its brand to target premium buyers.