THE NEXT BIG THING IN INDIAN APPAREL

Introduction
Aditya Birla Fashion and Retail Ltd. (ABFRL) is Indias No.1 Fashion Lifestyle entity and was formed after
the consolidation of the branded apparel businesses of Aditya Birla Group comprising Aditya Birla Nuvo
Ltd's (ABNL) subsidiaries Madura Fashion & Lifestyle Ltd. and Pantaloons Fashion & Retail Limited (PFRL)
in May 2015. ABFRL has been growing at a rate in excess of 20 percent over the last 5 years and hosts
India's largest fashion network with over 7,000 points of sale spread across over 375 cities and towns.
Madura Fashion & Lifestyle is the custodian of several icons, including the top four fashion brands of India
- Louis Philippe, Van Heusen, Allen Solly, and Peter England each of which clocked MRP sales in the
vicinity of INR 1,000 crore. It also includes India's largest fully integrated fashion multi-brand outlet chain
Planet Fashion; India's largest premium international brand retailer The Collective and the British fashion
icon Hackett London's mono-brand retail in India. A fast-fashion brand for the youth, People is a one-step
destination for international and fashion forward styles which is also a brand under ABFRL.

Van Heusen in India

Van Heusen is India's No. 1 premium lifestyle brand for Men and Women. With a rich heritage of 128 years
in the US, the brand entered India in 1990. Over a period of its 25 years of history in India, Van Heusen
has emerged as a fashion authority for the ever evolving Indian professionals becoming the go-to source
for the latest in fashion trends as well as for expert advice on what to wear, when to wear it and how to
wear it. Today, Van Heusen is not only the most preferred work wear brand, but also effortlessly straddles
the entire spectrum of occasions like casuals, ceremonial and party wear. The brand embodies the
positioning, POWER DRESSING. Van Heusen customers are the corporate leaders for whom elegance and
style are not just fads, but a philosophy. Thus the Van Heusen range is modern, minimalistic and timeless
in design and is distinguished by high quality. Van Heusen with its distinctive and fashionable range of
products helps corporate leaders create their best impact, as much as for their style as substance.

Innerwear The Next Big thing in Apparel

Innerwear happens to be one of the fastest growing apparel category in the country with a current market
size of Rs.19,966 Crore and is projected to clock a growth of 13% CAGR for the time period FY14-FY20. 7%
of the annual spend on apparels happens to be on innerwear. 63% market share is for womens innerwear
and remaining is for mens innerwear segment.

In-spite of such huge market, currently, around 65% of the industry happens to be in the un-organized
sector. The premium segment of the market is growing even faster, wherein the market has lot of
potential for growth in coming years. Some popular brands available in the market are Jockey, Rupa, VIP,
Hanes, CK, Lovable etc
Indian Innerwear
Market
19,966 cr

Womens
Innerwear
12,579 cr

Mens Innerwear
7,387 cr

Unorganised
~6000 cr

Organised
~1,400 cr

Unorganised
~10,500 cr

Organised
~2,000 cr

Mens Innerwear Market

The Mens Innerwear market is about Rs.7,400 Crore in market size with the organized sector accounting
for more than 75% of the market. The organized market can further be classified into 4 segments based
on positioning and pricing as follows:
1. Super Premium Brands like Calvin Klein and Tommy Hilfiger are present in the super premium
segment and they have a price point of greater than Rs.500 per inner wear. This segment accounts
for 2% of the market
2. Premium Between the price range of Rs.200 Rs.500 per inner wear with brands like Levis,
Jockey, UCB, US Polo present in the segment. Accounts for 12% of the market.
3. Mid-premium Also called the Mass premium segment, this is where Jockey predominantly
operates with Hanes as the other major brand in this segment. Indian brands like Rupa, Amul have
also entered this segment with new brands. This is between the price range of Rs.120 Rs.200
per inner wear. This segment contributes to 36% of the market.
4. Economy The biggest segment of all with 50% market share, most of the Indian brands like Amul,
Rupa, VIP, etc. operate in this segment with price points lower than Rs.120 per inner wear

The market share and distribution strength among the different players in India are as below:

JOCKEY India
JOCKEY entered the Indian Innerwear market in the year 1995 through PAGE Industries Ltd. who hold the
licenses for manufacture, distribution and marketing for JOCKEY brand of innerwear in India. In the last
10 years JOCKEY has done a considerable job to become the market leader by upgrading the market from
economy brands to mid-premium and premium brands.
Currently Jockeys market size for the Mens and Womens market are around Rs.1200 and Rs.450 crores
respectively.
JOCKEYs success comes from a few of the following factors:
1. Distribution Strength Is present across 1200 cities with around 400 distributors and 30,000+
retail outlets. Also has 176+ Exclusive Branded Outlets (EBOs) titled JOCKEY zones across the
country. All of this has resulted in JOCKEY commanding a 60% market share of IW sales in the
Large Format Stores(LFS). Its widespread distribution network has resulted in Tier 3 Cities
contributing to a staggering 45% of JOCKEYs annual sales.
2. Brand Positioning Brand has been positioned in the Premium category through all of its ATL
campaigns however, it has priced in the affordable range. Therefore, it straddles along the
Aspirational but affordable positioning with Young Indians perceiving the brand as
International, Contemporary and Trendy and sometimes even seen as a status symbol.
3. Marketing & Advertising JOCKEY has been actively involved in the marketing of its brands
through various ATL and BTL campaigns. It has an annual marketing and ad spend of about 6% of
sales.
4. First Mover advantage JOCKEY was the first player in the Indian Innerwear segment to
positioning themselves in the mass-premium category and this has been capitalized well through
its far reaching distribution network.

ABFRL Enters The Innerwear Market

Indias fashion power-house, Aditya Birla Fashion and Retail Limited, unfolds a new chapter in the Indian
retail landscape by foraying into the Rs.7000 crore mens Innerwear & Athleisure market. The company
introduced the all new range of Van Heusen mens innerwear & athleisure wear in Bangalore, Chennai
and Hyderabad markets with the localised distribution model in October of 2016.
Aditya Birla Fashion and Retails expansion into the two new categories is a strategic progression of the
brand, thereby offering complete fashion solution to the Indian Men. The new segment is based on the
ethos of Fashion, Innovation and Performance as we want to offer stylish, trendy and new-age product to
our consumers. We see big business opportunity in the growing Innerwear and Athleisure segment and
this will significantly contribute to the leadership position of the company. says Ashish Dikshit, Business
Head of Aditya Birla Fashion & Retail Ltd.
With this new initiative, ABFRL aims to expand in the new segment and has plans to bring a differentiated
product range to Indian customers. The company is also foraying into developing a fast growing category
of Athleisure. Athleisure is an emerging space of multipurpose wear that goes from gym to street to couch.
Crafted on the principles of Fashion, Innovation and Performance, Van Heusen Innerwear & Athleisure
offer sophisticated styling with new and innovative product features for the best in class comfort and fit.

Entry into IW segment - Where should we operate?

Based on the various market studies that were done as part of the exercise in entering this segment,
ABFRL identified considerable opportunity to enter the Premium and Mid Premium segment owing to the
key following factors:

Premium segment is growing fast and has limited competition

Anecdotal fatigue with Jockey
No viable alternative

Consumer Segmentation
The consumers in the Premium and Mid-premium segment can be categorized as follows:
1. Young Aspirers
Men employed in high paying jobs
Ambitious and show a keenness to purchase branded innerwear
2. Discerning Urbanites
Men employed in well-paying jobs
Evaluate value on a benefit and convenience metric rather than purely on price
Buy quality stuff and dont mind paying a premium for it
3. Optimistic Pursuers
Men from smaller cities who wish to have a lifestyle like metros
They seek opportunities to experiment with aspirational brands

4. Corporate Climbers
People with limited disposable income
These people are cautious buyers

Product Range

The brand offers Innerwear range comprising of four collections Classic, Platinum, Signature and Active.
Each collection has been designed to offer a differentiated range to the various consumer segments
Classic Classy wardrobe essential offering performance features like All day fresh and Colour fresh
Platinum The range offering sophisticated styling and elevated comfort with Pima cotton
Signature - Fashion innerwear with Flexi stretch feature for body defining fit
Active - True sports innerwear with Swift Dry feature.
Athleisure - Crafted with elevated fashion and new age fabric, it also comes with Smart-Tech feature
that offers benefits like Quick Dry, Stain Release and Anti-stat, making this a true cross over between
fitness and fashion

Channel Mix
Branded innerwear market is predominantly a Multi Branded Outlet (MBOs) led business with Exclusive
Branded Outlet (EBOs) for Innerwear and E-commerce channels occupying only 14% share of business.
MBOs contribute to almost 85% of the sales in the branded IW industry and this makes the distribution
channel look very similar to FMCG industry against that of branded apparel where EBO and LFS are still
the predominant channels for sales. Here, an MBO could be defined as an outlet which sells Multiple
Brands of IW and this could either be a large garment MBO or a neighborhood hosiery store.

Sales Contribution by Channels

2%

13%

EBOs

Sales Contribution by Outlets

1%

8%

MBOs

85%

Modern/Regio
nal Chains

11%

Hosiery Stores
Garment Stores

80%

Cosmetic Stores
Others

Purchasing Behavior
Mens Innerwear tends to be a low involvement category in the minds of most of the Indian consumers.
While the size for the inner wear is pre-determined, because this is an intimate product the brands and
styles are also pre-determined in the minds of the consumer for the most part. Due to this, product and
feature conversations rarely happen between the retailer and the consumer even though there is
considerable scope for both conversation and market upgradation due to the change in consumer
demographics and increase in purchasing power. This exercise becomes all the more difficult in an online
channel.
In the offline channel Mens Innerwear tends to be predominantly purchased in one of the two following
scenarios:
1. Purchased along with but at the end of outer wear apparel in the same departmental/LFS/hosiery
store
2. Customer visits an IW dedicated MBO and purchases inner wears that are needed for the next 36 months in a single visit
In the online channel, purchase tends to more or less mimic the offline store purchase behavior with some
customers purchasing IW at the end of their shopping and some buying IW dedicatedly for the next 3-6
months. However, here the customer is more aware of the size, brand and style that he purchases
regularly and tends to stick with it as he is more familiar and comfortable with the product.
There is however one more special scenario where the customer purchases Innerwear on an ad hoc basis.
This is driven by a need to travel and the customer usually purchases inner wears one week prior to his
travel.

Online Penetration
Currently the sales contribution from the E-com channel is only 1% and this is poised to grow anywhere
between 4% to 7% by 2020. This is primarily due to two factors:
1. The favorable demographic change with more than two thirds of Indias 120+ billion population to be
in the working age group and one thirds to be within the less than 30 age group
2. Interest penetration along with connectivity speeds is constantly on the rise and this paves the way to
reach a much larger geographical spread than that is ever possible through the brick and mortar retail
route.
These two factors result in younger and more internet savy customers in the coming days, which provides
immense opportunity for VHIW. Branded IW tends to be a business which is pre-dominantly led by the
MBO channel unlike the Branded Apparel space which is dominated by EBO and LFS channels. This
presents a challenge in scaling up both in terms of time and in terms of resources to be deployed to be
even present in a market.
Online channels like E-com presents us with an opportunity to overcome both these obstacles and reach
out to every single customer in every corner of the country.

Questions:
In the online channel,
1. What are the key success factors to scale up IW selling through E-com channel? What are the
competitive benchmarking on these factors and what are the opportunity for VH to penetrate this
segment fast?
2. Should the inventory planning (product mix, way of packaging) for E-com be different from the
offline channels? If yes, what are the key insights?
3. What is/are the Target Groups for conversion and market upgradation? How to identify the TG
for targeted marketing activities?
4. What should be the marketing plan to create awareness for brand VH, upgrade and/or convert
from the competition brands esp. Jockey?
5. What are the ways to communicate product features like Flexi-stretch and Quick Dry to the
consumers for market upgradation?

For any queries, please write a mail to mflpinnacle@abfrl.adityabirla.com