 "Despite dip in sales, India's clothing market expands 15% on price hike")
The apparel market in India grew by 15 per cent during 2022-23. However, the expansion in the apparel market was not led by an increase in sales but by price hikes, The Economic Times(ET) said in a report. In fact, sales went down by 3 per cent according to data released by the Clothing Manufacturers Association of India (CMAI), the report said.
Growth in sales is above pre-pandemic levels, but this growth came about only during Diwali last year. Rahul Mehta, chief mentor at CMAI, was quoted in the report as saying, "There was an upswing in sales after lockdowns after consumers rushed to malls and stores, but that has normalised now. We see large branded and organised chains performing well despite price increases, but a large chunk of smaller retailers and apparel makers operating out of multi-brand outlets in smaller towns are feeling the pressure due to inflation."
The clothing segment has grown at a rate of 10–12 per cent in the past, however, the growth was primarily driven by an increase in sales.
The price of cotton has increased by 50 per cent in the last two years and most of the manufacturers have hiked prices by 15-20 per cent, the report said. The price hike has resulted in a dip in consumer demand. This is especially true for small-town businesses in the unorganised sector.
Elaborating on the trends in the sector, the report added that there is a significant shift in the consumer preference, with consumers now wanting branded products. The branded apparel segment now accounts for 30 per cent of the market, which was only 25 per cent five years ago.
The report quoted Dinesh Taluja, chief financial officer at Reliance Retail, who said, "Fashion and lifestyle business continues to grow pretty strongly. We continue to improve our average bill values and conversion rates as our price-value proposition in this space is very very strong as you are aware of, there's a share of our own brands in our offline business."