Indian Apparel Market:

Current Status and Future Outlook

Harminder Sahni, Founder & Managing Director
Wazir Advisors, India

Indian Textile Summit, Mumbai

27th September , 2012

Agenda
Domestic Apparel Market: Current and Projected Market Size

Global Apparel Market: Current and Projected Market Size

Indian Market vis--vis Other Major Markets

Key Market Influencers

Future Outlook

India : Fastest growing economy by 2020

2011
GDP (USD)
EU 27

17,578

United
States

15,094

China

22,661

EU 27

Japan

5,869
2,493

CAGR from
2011 to 2020

United States

20,714

China

7,298

Japan
Brazil

2020
GDP (USD)

16,798

4.6%
1.8%
9.7%
2.2%

7,165

Russia

4,018

9.0%

Russia

1,850

India

3,902

9.8%

Canada

1,737

Brazil

3,885

5.1%

India

1,676

Canada

2,372

3.5%

Australia

1,488

Australia

2,175

4.3%

Others

14,577

Others

14,917

0.3%

Indian apparel market is large going to be enormous

Currently valued at USD 40 billion

Projected to grow at a CAGR of 13% (fairly reasonable)

Estimated to increase to USD 124 billion, by 2020
Indian Domestic Apparel Consumption
Values in USD Bn

124

+13%

25

27

31

2007

2008

2009

Source: Wazir Advisors

35

2010

40

2011

2020(P)

Womens apparel and brands across will dominate by 2020

2011, USD Bn
% share in
Total Apparel
Market

Branded

Men

40%

Women

Unbranded

% share in
Total Apparel
Market

Branded

Unbranded

11

39%

18

30

35%

10

42%

20

31

Kids

25%

19%

20

Total
Apparel
Market

100%

10

30

100%

43

81

Category

2020(P), USD Bn

Source: Wazir Advisors

Indian apparel market fastest growing at 13% CAGR

Values in USD Bn

Relative Apparel Market Size of Major Economies

2%
411

X%
10%
366

350

CAGR from
2011 to 2020

4%
316

Global Apparel Market

2011
USD 1,075 Bn
2020(E) USD 1,670 Bn

225

2%

150

110

13%

127

124

10%
87

40

EU 27

37

China

United States

Japan

India

Russia

4%
6%
75
45

100

3%
25

Brazil

34

Canada

5%
20

31

Australia

Others

2020

25%

22%

19%

8%

7%

5%

4%

2%

2%

6%

2011

33%

14%

21%

10%

4%

3%

4%

2%

2%

7%

* Percentages represent the market share of each country in the total global apparel market
6

73

Indian spending on apparel is relatively still very low

2011

Country Name

Per Capita Apparel Consumption

(USD)

Market Size
(USD)

UK

1,015

64

US

988

310

France

762

50

Japan

746

95

China

65

88

India

33

40

Developed markets are dominated by large retailers

Retailer

Origin

No. of Stores

No. of Countries

Revenue 2011

Sweden

2,000+

35+

18.3bn

Spain

3,000+

80+

17.7bn

30+

14.5bn

USA

3,000+

Developed markets are dominated by large retailers

Retailer

No. of
Countries

Revenue 2011

380+

42

6.85bn

1,600+

80

2.7bn

Italy

560+

23

2.3bn

Japan

1,000

Mainly Japan &

Asia

13bn

Origin

USA
Germany

Uniqlo
9

No. of Stores

China already has few billion plus apparel retailers

Retailer

10

No. of Stores

Revenue 2011

10,000

1.3bn

1,500

770mn

8,000

1.3bn

3,700

1.0bn

Indian fashion houses growing rapidly but long way to go

Turnover
(in USD Mn)
Company Name
2011

11

Madura Fashion & Lifestyle

400+

Raymond Ltd.

200+

Arvind Ltd.

200+

Consumer Trends Influencing Indian market

Increasing Consumerism
- Increasing income level
- Increasing discretionary spend
- Increasing urbanization
Preference for Readymade
- Convenience
- Exquisite designs and wide variety
- Mismatch between desired and actual product
Preference for Branded Products
- Growth in organized retail
- Increasing online retail
- Increasing presence of international brands

12

Major Influencers of Indian Apparel Market

Increasing
Consuming
Population
Increasing presence
of International
Brands

Increasing
Discretionary
Spend

Apparel
Market
Increasing
Disposable Income

Increasing Online
Retail

Growing Organized
Retail
13

Growing consuming population in age group of 15 44 years

Population Segmentation
1600

~1,347

1400

~1,200

1200

800

in Mn

129
213

96
170
160

1000

194

190

210

400

220

238

200

350

363

2011

2020 (P)

600

~48% of population
is between 15-44
years

0-14

15-24

25-34

35-44

45-59

60+

Median Age in India increasing from 23 years (2000) to ~27 years in (2020)

India has youngest population base with more than 60% of the population
between 15-59 years and 49% of population less than 25 years

14

Consumption shifting from necessities to discretionary spending

2011
5%
2%

2020

8%

11%
7%
38%

29%

4%

18%
20%
9%

11%
12%

4%

10%

4%

Food, beverage, tobacco

Household Products
Communication

5%

3%

Apparel
Personal Products & Services
Education & Recreation

Housing & Utilities

Transportation
Healthcare

The share of disposable income spend on apparel is expected to increase from 4% in

2011 to 5% in 2020 owing to

Greater number of households entering higher income bracket

Increasing income levels fuelling greater consumption
15

Organized retail estimated to grow 5 times to 150bn by 2020

2011
USD 1 Bn,
0.2%

USD 30 Bn,
6%

USD 469 Bn,

94%

2020(E)
USD 6Bn,
1%

USD
744Bn,
83%

Indian Retail Market Size

16

2011

~USD 500 Bn

2020

~USD 900 Bn

Source: International Monetary Fund, Wazir Analysis

USD
150Bn,
17%

Organised Retail
Unorganised Retail
Online Retail

Apparel dominates organized retail, with ~35% share

Share of Various Segments in the Retail Industry (%)
Total Retail

Organised Retail
0.9

1.7
1.1
2.4

0.9

0.1
0.3

0.3

3.1

3.5

3.2 2.8

9.2

2.4

12.5

4.3

4.7

2.9
4.1

0.4

5.9
34.9

7.3

7.7
67.6

0.5
2.5

17

2.9

9.3
0.7

Food & Grocery

Apparel & Clothing

Accessories

Footwear

Jewellery

Timewear

Eyewear

Catering and Food Services

Home & Interiors

Leisure

Mobile/Telecom

Pharmacy

Consumer Electronics

Personal care & Fitness

Entertainment & Gaming

Apparel and Clothing

Online Retail: Growing fast and tapping the true potential

Value, Online retail market in
India, in USD million
6180

12%

Computer software

17%
17%

Consumer Electronics

6000

14%

4000

17%

Computer hardware

2000

12%
22%

Comparison Shopping
10%

360

0
2011

9%

Books

CAGR: 37%

2020(E)

7%

Flowers/ Gifts/
Greetings

4%

Retail - Movies

4%

Worldwide share of Online

apparel retail is 18% compared to
only 4% in India

6%

4%

Luxury Goods/
Accessories
Apparel

4%
4%
18%
4%

Worldwide

18

India

With online retail market

expected to grow at 37% CAGR
there is huge potential for
Apparel online retail to grow
substantially

Online Fashion Retailers

Indian

Year of
Establishment

Reach
(in Mn)

Penetration
(cities)

Range
(brands)

Revenues
(in USD Mn)

2004

1.2

1,100

150

20

2007

1,200

350

100

2010

3.6

1,200

500

11

2011

0.5

500

30

2012

1.5

500

500

150

2007

10

54

300

2000

190

1,000

500

International

19

India Apparel Market 2020 will be..

USD 120 billion plus

In Top 5 markets in the world (7% market share)

Womens wear (42%) would deservingly be bigger than mens wear (39%)

Branded market (43bn) will be bigger than total market today (40bn)

All major global brands will report India as a major contributor to sales

Will have few many billion dollar brands and retailers

Few fashion houses will have more than 20 brands portfolio

Couple of retailers will have 5,000 plus stores

An online retailer would have crossed billion plus mark

An online retailer may be the largest retailer

20

Question is

There will be market

There will be consumers

There will be retailers

There will be brands

What role can your company play in this?

21

Thank You for your time and attention!

Harminder Sahni, Founder & Managing Director
Wazir Advisors, India