Indian fashion retail poised for big timesWednesday, 16 February 2011
With fashion apparels and lifestyle products accounting for around 95 per cent of total sales in department stores, and 70 per cent in hypermarkets such as Big Bazaar or Spencer’s Retail, this segment is rapidly growing with increasing incomes of the urban population. Brands in apparel, textiles, jewelry, accessories, footwear, cosmetics and salons have raised the Indian business parameters higher than ever before. With a population touching one-and-a-half billion and a massive consumer class, India is considered as the most preferred destinations for foreign investments. The Technopak study shows that men’s wear is the biggest segment in apparels estimated at around Rs 66,300 crores compared to women’s wear at Rs 57,745 crores. However, women’s wear is growing faster at a CAGR of 12 per cent and is expected to gain majority share in future. Kidswear is also growing rapidly with higher growth in girls wear.
There are many factors that have helped the fashion industry thrive over the last decade. The massive spread-out of malls, hyper markets and supermarkets, mergers and acquisitions that have allowed international brands to step in, expansion of domestic brands and retailers along with a boom in premium luxury retail segment have all helped in the growth story. Indian fashion designers having made a mark in international ramp shows, improved merchandising and customer relations by apparel brands have also helped this segment. Companies such as Madura Garments, Raymond, Levi’s, Arvind Brands etc have all achieved their targets while adding more EBOs, MBOs and LFS to their retail chains. Having created a strong brand identity in all their related segments, they have all expanded their product assortment mix while also increasing their production capacity year-on-year.
However, if the retail boom is to continue, retailers and brands should take some factors into account such as collaborative tie-ups with non-competent services providers and brands, uniform sizing and personalized services throughout the country. At the same time they have to concentrate on certain lucrative market segments. Also organized merchandising format, trained sales personnel, improved customer relations and EBO’s and shop-in-shop system for high-profile brands is also on the cards. As regards selling techniques, the brands should offer value-added products and not cash discounts.
Women’s western wear and children wear is a lucrative segment that has been booming over the last few years. Many domestic and international brands are now cashing in on this segment. With women rapidly taking to western wear even in the smaller cities and increase of working women with more disposable incomes, this segment is one of the fastest growing in India today. From economy to premium players, both domestic and international brands are now realizing the enormous potential of penetrating deep into the Indian markets and are reaping in the harvest while it lasts.