Branded vs Non Branded

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  • Topic: Jeans, Tier 1 capital, Denim
  • Pages : 5 (1207 words )
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  • Published : February 23, 2013
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EXECUTIVE SUMMARY

Western wear taking Indian apparel market by storm

A slight slowdown in economic growth and a depreciating rupee value had minimal effect on growth in either the value or volume of apparel sales throughout the 2006-2011 review period. The influence of Western wear infiltrating the Indian culture remained one of the biggest driving factors boosting growth in volume sales. More people are travelling abroad much more frequently and becoming exposed to Western fashion. The increasing disposable income across key cities, comfort fitting and rich appeal are major factors that are driving sales of branded apparel. What’s more, a growing number of people working in the middle- and senior-level management are buying new varieties of Western clothing, spurring this industry to new heights.

Plentiful discounting, seasonal offerings draw consumers

Cotton prices saw a drastic decrease in 2011 and this triggered manufacturers and retailers to offer steep discounts to clear their stock. The festival discounts and seasonal promotions became a key trend to attract consumers, where retailers capitalised effectively on the trend that in India festivals are particularly special occasions for which consumers aspire to purchase new clothing. This festive discount offering has made huge business revenues for manufacturers and retailers during such occasions in the form of, for example, year-end sales, “Dasara” or “Diwali” super dhamaka (huge savings) offers, as well as Christmas and New Year’s sales.

Foreigners making bold moves, but domestic players also strengthening

Global brands are making their mark and increasing their presence across tier 1 and tier 2 cities, whilst at the same time, regional local brands are also upping their competitive presence. Zara increased its number of outlets to six stores in 2011 and is planning to open another four stores in 2012. Other players such as Mango, Arrow and Diesel are also following the same trend. Several global players including Massimmo Dutti, GAP, Banana Republic, and Old Navy may make a further push in 2012 now that the central government has given the nod to 100% FDI in single-brand retail. Joint ventures including Arvind for IZod and Page Industries, national owner of Speedo, will also increase the presence of global brands in India. Certain local players have also strengthened their presence, investing in aggressive expansion in opening their own exclusive brand outlets (EBOs). Players such as Black Bird, F Square, Ramraj and Mustard in southern India proved tough competition to the national and international brands, these small domestic brands are growing by over 25% annually. These brands are also expanding their base to other parts of India to become national players.

Apparel specialist retailers still represent key retail channel

Approximately 95% of value sales of apparel went through clothing and footwear specialist retailers in 2011, with exclusive brand outlets and specialist clothing stores the main channel for consumers to shop for apparel. However, department stores and leisure and personal goods retailers witnessed strong growth as new shopping malls opened up and offered a wide range of different brands under one roof.

Bright outlook for apparel industry over the forecast period

Value sales of apparel are projected to be very strong over the 2011-2016 forecast period, driven by a growing shift in preference towards Western clothing and branded products, particularly across tier I cities. Companies are also expected to branch out to tier 2 and tier 3 cities outlets across India, which represent as yet an untapped market for branded apparel. The increasing disposable income in these cities, comfort fitting and rich appeal are the major factors that are expected to drive the apparel market towards long-term growth.

Jeans in India - Category Analysis

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TRENDS

• Value sales of men’s jeans...
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