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LITERATURE REVIEW

INDIAN TEXTILE INDUSTRY –AN OVERVIEW

The global textile industry is worth over US $ 4400 billion, with clothing accounting for 60% if it. United States and EU contribute about 65% of the total industry. Japan, Australia and New Zealand are the other major countries which are the major consumers of the Indian textiles (ibef.org)

China leads the international textile trade and is followed by India at 8% of the global sales. The Indian textile industry accounts for 15% of the total industrial output and 5% of the GDP. (ibef.org)

EXPORTS FROM THE INDIAN TEXTILE INDUSTRY

The textile industry in United Kingdom is a buyer driven chain (Strange, 2006). He adds that in buyer driven chains, the production of the finished goods is effected through independent subcontractors under original equipment manufacturers (OEM) arrangements, and the lead roles in establishing and co-ordinating the chain are taken by retailers and brand-name merchandisers in the United Kingdom.

The textile industry is a major contributor to India’s export earnings. The export basket consists of wide range of items containing cotton yarn and fabrics, man-made yarn and fabrics, wool and silk fabrics, made-ups and variety of garments. India’s textile products, including handlooms and handicrafts, are exported to more than a hundred countries. However, the USA and the EU, account for about two-third of India’s textiles exports. The other major export destinations are Canada, U.A.E., Japan, Saudi Arabia, Republic of Korea, Bangladesh, Turkey, etc. (Source: Textiles Ministry, Government of India, www.texmin.nic.in )

The cheap labour costs have made India as a favourable sourcing destination for the international buyers. The domestic producers are improving their production facilities, taking into account the increasing interest from the multinational players. A sector wise analysis of India’s textile exports is given below.

• Readymade garments

• Cotton textiles

• Man made textiles

• Silk textiles

• Woollen textiles.

(Source: Textiles Ministry, Government of India, www.texmin.nic.in)

BRANDING AND ITS SIGNIFICANCE WITH REFERENCE TO THE TEXTILE INDUSTRY

Developing and managing a strong brand has become a crucial task for successful organisations (Kapferer, 2004). Branding has become the crux of selling in the new economy (Nacht and Chaney, 2005). Textile industry is a highly dynamic and competitive market place, thanks to the ever changing needs of the customers. Branding would play a big role in offering an added value in the textile industry.

Branding has been used as a means of textile and apparel differentiation in textiles ,but literature focused on the development of brands with reference to textiles and apparels is quite limited (Bruer et.al, 2005). The importance of identifying a right brand strategy is crucial, as it would be of great importance in developing a foothold for the textiles in a foreign market. Kapferer(2008) comments that a brand strategy can be used in two cases, i.e. one when a company already exists in the market, and the other when a company wants to enter the market and wishes to make it known to the potential clients.

Strange and Newton(2006) comments that the retailers possession of a strong brand name enables them to outsource the production activities within the commodity chain to independent suppliers, whilst leveraging their control over the activities, within the chain to obtain lower costs and higher profits. This explains why many of the retailers outsource their production to low cost destinations, thereby minimising their cost of production and earning higher profits. Hence it can be assumed that the presence of a strong brand name is vital for a retailer which would help them in maximising their profits, thanks to their strong brand name and hence control over the outsourcing of their manufacturing...
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