INDIAN APPAREL RETAIL

MARKET - AN INSIGHT
Introduction
Today fashion is seen everywhere in the Indian home
market. With rising income levels,
growing ‘Look Good, Feel Good’ attitude and the
development in the retail sector, the
clothing market certainly holds enormous
opportunities.
Market defintion
The apparel retail industry consists of the sale of all
menswear, women’s wear and children’s wear.

 The menswear sector includes all garments made for

men and boys. It includes both outer and under
garments.

The women’s wear sector consists of the retail sale of
all women’s and girls garments including dresses, suits
and coats, jackets, tops, shirts, skirts, blouses,
sweatshirts,sweaters, underwear etc.

 The children’s wear sector is calculated as sales of

garments for children between the ages of 0-2 years
Players in the market
Among the few players who have been catering to the
branded market are Park Avenue, Charagh Din,
Liberty, Double Bull, Proline and Snowhite.

It took a quite long time for brands such as Allen Solly
and Van Heusen to create a respectable market share in
the ready-to-wear market.

 Big players like Tata, Raheja, Biyani, etc have

intensified the competition with their professional retail
chains like Westside, Shopper’s Stop and Pantaloons.
International brands
International brands such as Benneton, Lacoste, Levi Strauss, Crocodile,
Dockers, Lee, Wrangler, Nike, Reebok, Adidas, Guess, Esprit, Mango, Hugo
Boss, Mark & Spencers and Tommy Hilfiger have already built a retail presence
in the country.

market watchers point out that several more such as Versace, FCUK, Zara,
Mother Care, Ikea, Fendi, NEXT, Debenhams, Trussardi, and DKNY have
charted out a strategy to enter the Indian market.

 Most of the brands entering the market are targeted at the premium end.
According to estimates, the premium apparel segment in India is valued at about
Rs 1,900 crore and growing at 20 per cent.
Market share:

Men’s apparel market is 46 percent of the total apparel market in

India.

Whereas, women’s apparel market is 17 percent of the total

apparel market in India.

Kids’ apparel market is 37 percent of the total apparel market.

Being the brand penetration in this segment lowest at 9 percent

shows a lot of potential for the branded players to exploit this
segment.
Market share
The Indian apparel retail industry generated revenue of $2.0 billion
in 2004 with a growth rate of 8.2% during 2000-04.

 As a result, this industry in India is second largest in the world

after China.

Most of the brands entering the market are targeted at the premium
end. According to estimates, the premium apparel segment in India is
valued at about Rs 1,900 crore and growing at 20 per cent.

The Indian apparel retail industry varies within even short distances,
as the designs of the outfits are based on the regions fashion trends. 
Recent trends
In apparel retailing which was once strictly a made-to-
order market for clothing has changed to a ready-to-
wear market.
 Flipping through a catalogue, picking the color, size
and type of clothing a person wanted to purchase and
then waiting to have it sewn and shipped was standard
practice.
Fashion element and design content was minimal in
the pre-1990s, owing mainly to the lack of national
level brands
Current scenario
Preference for readymade garments is increasing and this has
become inevitable with the rise in urbanization.

The preference for the branded Western and Indo-western

apparels among the working women is on the rise, which is a
welcome relief for the manufacturer and retailers of branded
apparel.

The dressing habits are getting refined if not changed specifically

among the working women. Now, across metros, apparel buying
is the second biggest consumption category at malls, after food
products.
Current scenario
 Now, across metros, apparel buying is the second biggest
consumption category at malls, after food products.

Retail today is about making a consumer happy. Therefore

quality will entertain no barriers between domestic and
foreign goods.

 There has to be upgradation of skills, technology and

manufacturing facilities alongwith usage of good quality,
performance fabrics by the manufacturers.
Current scenario
Pricing is also becoming a key factor as ‘value for
money’ becomes a deciding factor in the purchase
decision of the consumer when there is such a wide
basket to choose from.

The passion for “foreign brands” is on the decline in

the Indian market. This is because the availability and
accessibility of these brands is becoming much wider
and therefore the “snob value” is being lost.
Current scenario
Also there are many good Indian brands making a
niche for themselves in the domestic market giving the
foreign brands tough competition.

One such success story is the “Color Plus “brand of the

Ambattur Clothing Co.
Credit cards
Without question, the consumer boom is being driven by a new
openness about using credit cards. According to ICICI Bank, credit
card spends increased by 37 per cent in 2003 compared to 2002.

In the beginning of 2004, there were close to a million credit card
users in the country, and the number of users has been growing at 31
per cent annually. Clothing, along with shopping for jewellery and
eating out, contribute 45 per cent to credit card spends, up from 21 per
cent a year ago.

In fact, apparel retailing is no longer a metropolitan phenomenon;

companies are now quickly branching to smaller cities in an effort to
cash in on the consumer boom.
Changing consumer behavior

 A large young working population with a

median age of 24 years; growing numbers of nuclear
families in urban areas; increasing working-women
population and emerging opportunities in the services
sector have increased the average consumer spend on
branded clothing. quality retailing was limited to high
streets and standalone departmental stores.

Now, across metros, apparel buying is the second biggest

consumption category at malls, after food products.
Changing consumer behavior
The Indian consumer is becoming an astute and
demanding customer.

The term “glocal” implying a ‘global product in local

market’ best describes the requirement of today’s customer.

Without question, the consumer boom is being driven by a

new openness about using credit cards. According to ICICI
Bank, credit card spends increased by 37 per cent in 2003
compared to 2002.
Changing consumer behavior
It is worthwhile to mention that the rise of younger class
of middle-class consumers, spawned by the booming
BPO and IT sector, has led to burgeoning demand for
locally designed, ready to wear clothing in Indian metros.

 As many surveys have established, with good salaries,

strong peer pressure and the growing availability of
brands across product categories, spending in retail is
being driven by the youth segment in large and mid-
sized metros (2).
Unorganised & organisedretail stores
Leading domestic retailers are becoming more firmly
entrenched, increasing their scale of operations and
stabilizing their logistics and technology initiatives.

A few significant foreign players have been selling

their branded apparel in India for number of years.
Unorganised & organisedretail stores
But, now, just like their India counterparts, global apparel
brands are setting up their own apparel outlets, instead of
just selling through departmental stores.
Though local retailers generally enjoy higher margins,
they wont be able to keep global retailers at bay for long
because of international experience, buying power, IT
systems and cash flow to tolerate lower profits.
Presence of these brands will make the Indian Consumer
become more aware of the international fashion and
lifestyle trends leading to a move-up of the industry in the
value chain.
Factors affecting Indian Apparel retail
industry
 Enhancement of local capabilities in the area of logistics i.e. warehousing and
customized tracking systems.

 Interesting emergence of design as a source of competitive advantage in Indian

apparel.

Growing importance of local investment by Indian apparel firms as a way to

counter the exclusion of India from all major regional trade agreements and the
advantage of tariff free entry into major markets that many of Indias competitors
enjoy i.e. Mexico in the US markets, Turkey and Bangladesh in EU markets.

 Increasing focus on domestic brands 

Apparel retail will have to ensure that its own brand includes the
characteristics of product brands. Retailers need to work on three
dimensions to achieve this:

(1) Brand value: 

The retail brand has to translate and transmit clear values to the customer. For instance,
value for money, Luxury shopping redefined are some of the slogans. Some companies
have attempted to define this in their mission statements but they are often too vague
and not actionable. For example the U.K. Virgin brand has the value of challenging
conventions and the U.S. retailer Nordstrom has built the value of customer service.

 While many Indian product brands have successfully weaved values around their
brands (Hamam on trust, Godrej on quality and TVS on service) retailers are yet to
develop a consistent value across their businesses.
Some of the brands of domestic apparel retail of
Pantaloon and Lifestyle are also attracting attention to
the consumers. Pantaloon retail brands include
Honey, Bare, Rig, UMM and Big Bazar category
comprises DJ&C, Knighthood, Studio NYX etc. Among
the Lifestyle brands, MAX, KAPPA, BOSSINI are
becoming increasingly popular to the domestic front. 
Brand strategy:

It is imperative that retailers have a systematic strategy on issues

like whether to develop the retail brand or corporate brand and
decisions on one product/one brand that they may be selling in
their shop. Retailers can also decide to launch high quality retailer
brands (own labels) backed by promotional campaigns,
reinforcing clear personalities. Pricing policies, today position
retailer brands as good value lines or premium lines (Nilgiris
department stores prices its grocery lines above manufacturer
brand prices).
The view that retailer brands offer a cheaper alternative to manufacturer
brand is no longer valid. There is even scope for retailers to develop
alternative types of own labels targeted at different consumer groups in
their outlets.

 An essential ingredient for success, in such cases, must be consumer-

relevant added values not just lower prices. It is only a minority of
consumers, today, who are prepared to trade off added values for lower
prices. Experienced consumers are no longer primarily motivated by low
prices. There is scope to attempt a retail segmentation strategy. For
example, DCM Benetton India redesigned its stores as per its international
format and also repositioned the brand from a casual wear brand to a
wardrobe option.
The company is now attempting to target a niche
audience through its concept stores. It launched a
Baby-on-Board' store, which targets mothers-to-be
and kids, an `Accessories' stores that sells luggage,
bags, sunglasses and vanity cases and an Adults Only
store that showcases Benetton's apparel collection for
men and women.
3) Brand structure: 

Operational levels of the retail business have to be held together to

integrate the whole brand proposal. At this level, marketing, human
resources, distribution, logistics, administration and sales have to work
towards a common brand value that has to be communicated to the
consumer.

The retail brands messages must be weaved into the every day experiences
that the consumer has with the retail brand. Brand building constitutes a
way in which the main value of the retail store shifts to what has been
traditionally called an intangible.
Indian apparel retailing is coming of age and needs to
have a clear brand proposition to offer the discerning
Indian consumer. There is no doubt that the apparel
retail business is gravitating from high street towards
destination shopping (mall development) with
enhanced mall space expected to hit the metros and
mini-metros across the country.
pantaloons
has also introduced a number of specialty fashion stores where
it has launched several clothing lines of its own. Within the
brand retailing space,
Pantaloon has also tied up with some of India’s most popular
brands like Gini and Jony to sell them in their stores.
Rather than attempt to compete with existing popular brands
the company has decided to partner with major Indian brands
and leverage the success of these brands in the ambiguous
Indian market.
For whatever reason these brands have achieved success and a
loyal following; Pantaloon’s move is sure to bring in more
customers and retain them.