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If current market trends are anything to go by, then the Indian apparel retail market is expected to grow by 21% in the next four years. And if India manages to attain the projected market share of close to 90 billion USD by the end of this year, then it will help the country become the third largest apparel retail market globally.
The textile and clothing sector apart from being the oldest is also among the largest in the country. According to the Indian Brand Equity Foundation (IBEF), “The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries”.
The Indian textile industry is one of the largest contributors to the Indian GDP. The industry also employs over fifty million people directly and close to a hundred million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to India’s gross domestic product (GDP), and 14 per cent to the overall Index of Industrial Production (IIP). The textile industry is also one of the largest contributors to India’s export with approximately 13.5 per cent of total exports.
In the course of the past few years, organized Indian apparel retail has come out to emerge as one of the fastest-growing markets in the world. Even with the menacing wrath of the pandemic which did impact the industry in 2020, despite all the pandemic-induced constraints, the industry seems to be coming back with a vengeance – at least that’s what the numbers state.
In the latest business survey conducted by the Retailers Association of India (RAI), the overall retail business has grown by 10 per cent in February 2022 compared to what it was in the same month a year ago. Apparels, in particular, showed double-digit growth in the month with a consistent fall in Omicron cases.
So, it’s been a decent start to the year for the apparel retail market. And it’s not just from RAI! The previously mentioned report by Statista amongst others points towards a healthy and more promising market scenario for Indian retailers big and small. With the evolution and the rapid changes in market penetration strategies, the Indian market now offers a very favorable environment for new small players to come out and explore the option. Many government-sponsored schemes for the Ministry of Micro, Small & Medium Enterprises offer support and opportunity for these smaller players. Apart from the central government, even many states have realized the importance of the contribution of a wider network of small homegrown companies in terms of employment, revenue and an index of development supporting and leveraging other existing industrial setups.
The Government of India has launched the 'Apparel Park for Exports' scheme for imparting a focussed thrust for setting up apparel manufacturing units of international standards at potential growth centers. Fiscal Benefits- 75% of the capital expenditure will be incurred by the State Government on the infrastructural facilities, 25% by the agency - limited to a maximum of INR 10 crores. INR 5 crores for setting up of an effluent treatment plant, creche/s, any multi-purpose center/hall for marketing /display etc. Grant up to 50% of the cost of any training facility created in the park - up to a maximum of INR2 crores. There are various non-fiscal benefits e.g., free land, flexibility in labor laws, etc.
The current resources present a plethora of strategies for the new smaller players, as to how one can enter, sustain and grow in the Indian retail market or any new market for that matter. The below might not be limited to fashion but offers a brilliant solution for any new firm.
1. Sourcing sustainable products from an Indian homegrown brand, Nicobar has completely committed itself to making clothing and accessories from recycled materials. For instance, Nicobar is using the roots of a throw-away tree to make a wooden homeware collection.
2. Using recycled and reusable packaging, some brands like Doodlage are using fabric wastes to make packaging for existing products. Another brand Suta is using old sarees to make packaging bags.
3. Redesigning green stores by using paper usage in price tags and receipts. Another way is to use more efficient lighting instead of using traditional light bulbs.
4. Offer eco-friendly delivery options- Brands can use electric vehicles to deliver.
Although it’s hard for retailers to step out of the quick delivery game, it’s possible to take steps in the right direction. Amazon, famous for its same-day Prime delivery, said it now moves most of its inventory without air transport and has pledged to make 50% of its deliveries “net zero carbon” – meaning they won’t create any harmful emissions – by 2030. The brand also plans to start using a fleet of electric vehicles.
Yes, Indian fashion retail is definitely poised for ascendancy. The revival started sometime in late 2021 when people came out and started buying everything they couldn’t in 2020 and early 2021 – especially apparel and fashion accessories.
Over the last 15 months, one of the most notable developments has been the successful acquisition of many small brands/retailers by big retail giants. It happened across the globe, and it happened in India. One such recent development was in March 2022 when India’s retail giant Reliance Retail Ventures (RRV) bought a majority stake in Clovia, a popular lingerie brand, for US $ 125 million or Rs. 950 crores (owned by Purple Panda Fashions). And it’s not the only one! RRV had earlier announced an investment in 30-year-old designer brand Abraham & Thakore (A&T) for a majority stake.
Earlier this year, we saw Aditya Birla Fashion and Retail (ABFRL) buy a 51 per cent stake in House of Masaba Lifestyle for around Rs. 90 crores to enhance its portfolio of fashion labels. This is in addition to its investments in Sabyasachi and Tarun Tahiliani. RRV and ABFRL have today left a mark on the global front too.
More on this, Ananth Narayanan, Founder of Mensa Brands, says, “In all our categories (apparel, beauty, and home), we are not trying to build a brand for India, but a brand for the globe. 30 percent of our revenue already comes from overseas markets.” Bengaluru-based Mensa Brands has been successfully acquiring direct-to-consumer brands and helping them scale within the home market and overseas.
With markets opening and the economy reviving, happy days are here again for Indian fashion retailers/e-tailers, and the pace at which the market is growing is good enough to make it one of the biggest in the world this decade.
And that’s not an exaggeration!
Shraddha Kochar was born, raised and completed her education in Delhi. She has been in the fashion industry for the last 7+ years, with varied experience of working in startups, national brands, e-commerce, exports and education sector. She likes ...
to travel and explore places for food. She mystically landed in the education sector and has been teaching since then. She enjoys reading about fashion and lifestyle brands, fiction, fitness, personal finance and philosophy. She is trying to become a conscious and aware human, keeping in mind the 17 Sustainable Development Goals (SDG’s).
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