Presentation about the future of fashion industry in India

1. EMERGING OPPORTUNITIES IN
FASHION INDUSTRY
Dr. M.MADHAVAN
ASST. PROF. OF ECONOMICS
ARIGNAR ANNA GOVT. ARTS COLLEGE
NAMAKKAL, TAMIL NADU

2. THE FASHION
Consumer acceptance of a
particular style at a particular
period of time
Fashion
Demographics
Psychographics
Sociological
Psychological

3. FUTURE OF FASHION & TEXTILE INDUSTRY
DEPENDS ON



TECHNOLOGICAL UP GRADATION
ROLE OF GOVERNMENT
EXPLORING NEW MARKETS & PRODUCT
INNOVATION / DEVELOPMENTS

4. TEXTILES
WOVEN
WOVEN
(bond)
KNITS
NON
( felt )

5. THE STEPS TOWARDS FREEING INTERNATIONAL
TRADE SO FAR
ATC (Agreement on textiles and clothing – since 1995)
WTO (Member signatories removed quotas from Jan 1, 2005)
Step
Period
% to be brought under GATT
I
1.1. 1995 to 31.12.1997
16%
II
1.1.1998 to 31.12.2001
17%
III
1.1.2002 to 31.12.2004
18%
IV
1.1.2005
49%

6. Who can win?
The person who can produce
quality products at competitive
price

7. How to achieve?






Productivity improvement
Technological up gradation
Stringent control over quality
Frequent training
Sourcing new markets and introducing
new strategies in marketing
Own design & Brand development

8. The Indian scenario

9. OPINION OF TRADE EXPERTS ABOUT INDIAN TRADE
“OUR COUNTRY IS CONSISTENTLY LOSING EVERY OPPORTUNITY TO MEET
THE INTERNATIONAL FRATERNITY, TO IMBIBE GLOBAL WORK PRACTICES,
TO ACQUIRE GLOBAL VISION, FORM STRATEGIC ALLIANCE AND JOINT UNITS,
TO REACH OUT NEW CUSTOMERS, OR MARKETS, KEEPING ALOOF IN
INTERNATIONAL SEMINARS, CONVENTIONS, INDUSTRY FORUM.
IN CASE OF GARMENT INDUSTRY WE REPRODUCE THE DESIGNS GIVEN BY THE
BUYERS & NOT DEVELOPING OUR OWN STYLES AND DESIGNS.

10. GLOBAL COMPARISON
PARAMETER / SECTOR
INDIA
GLOBAL
COTTON CONTAMINATION
30 – 50%
15 – 18%
COTTON PRODUCTIVITY
300 KG / HA
SPINNING CAPACITY
SHUTTLE LESS LOOM
EXPENDITURE ON R & D
PROCESSING TECHNOLOGY
TESTING OF MATERIALS
MANUAL VS. POWER MACHINES
ISO 9000
INFRASTRUCTURE
WORKERS TRAINING
580 KG / HA
36%
90%ITALY 50% USA
9550
85,800 CHINA 29,000 KOREA
0.2%
1.5 TO 2%
MANUAL AND SEMI AUTOMATIC
CLIENT ORIENTED
31% : 69%
ADVANSED MECHANISED
INTEGRAL PART OF THE SYSTEM
0.1% : 99.9%
462
3,673
20
52
AD – HOC
SYSTEMATIC AND INDUSTRY COMMITTED

11. LABOUR COST COMPARISON
Average cost per operator hour (in cents)
India
0.58
Pakistan 0.37
China
0.69
(COMPLED BY: WEMER, USA)

12. Man-made Textiles 7.67%
7.67%
Silk Textiles 2.09%
2.09%
Woollen Textiles 2.5%
2.50%
Coir 0.49%
0.49%
Jute 1.22%
1.22%
Man-made
Handicrafts 13.3%
13.30%
Textiles 7.67%
Cotton Textiles 32.4%
32.40%
Readymade
Readymade 40.2%
Garments Garments 40.2% 40.20%
INDIA'S Textile Exports
Silk Textiles 2.09%
Woollen Textiles
2.5%
Coir 0.49%
Jute 1.22%
Cotton Textiles
32.4%
Handicrafts 13.3%

13. CHINA VS. INDIA TEXTILES – PRESENT STATUS
ΠVERY HIGH DISCIPLINE
VERY AVERAGE DISCIPLINE
ΠLOW POWER COST
HIGHER BY 54%
ΠLOW INTEREST COST
14.5% TO 18% AS AGAINST 6%
ΠHIGH MODERNIZATION
SLOW RESPONSE
ΠSIMPLE REGULATIONS
COMPLEX AND COMPLICATED
ΠHIGHLY DEVELOPED INFRA-STRUCTURE
POOR INFRA-STRUCTURE
ΠEXIT POLICY
UNCERTAIN POLICIES
ΠSTRONG RE-TRAINING
TOTAL ABSENCE OF TRAINING
Œ
ECONOMY OF SCALE UNIT
SLOW RESPONSE
Œ
HIGH QUALITY PRODUCT
CASUAL WEARS
Œ
TARGET 40% OF WORLD SHARE
PROVIDING 15% BUT NOT REACHING EVEN 2%

14. Undeveloped infrastructure
Low productivity / high absenteeism
Uncooperative labour
Environmental issues
Highly regulated sector
URE
FUT
N
TAI
CER
UN

15. PRODUCTIVITY - YIELD
COTTON
Factor
Unit
Area (‘000)
hectare
China
India
Difference
4,600
8806
+ 4206
Production (‘000)
tons
4,600
2805
_ 1795
Yield / hectare
tons
1,000
318
_ 682

16. APPAREL IMPORTS (MILLION US $)
COUNTRY
% of share in world trade apparel
World
198940
USA
66392
33.4
EU
85909
43.2
SOURCE WTO STATISTICS

17. INDIA’S Share of Market Segments
CANADA
5%
CANADA
N.QC
USA
40%
N.QC
16%
EU
USA
EU
39%
Marketwise Analysis
Exports to USA have gone down substantially by (-) 12.92% in value, and by (-)
6.01% in quantity terms. Canada has also registered a substantial loss of (-) 15.10%
in terms of value and (-) 16.93% in terms of quantity. EU has seen an decrease of (-)
4.87% in terms of value and a increase of 1.55% in terms of quantity. Non-Quota
countries have registered a decline of (-) 52.45% in quantity terms and of (-) 57.07%
in value terms.

18. VOM
CHINA
INDIA
EXPORTS
$ bn
194.8
34.5
IMPORTS
$ bn
165.8
44.46
BOP
$ bn
+ 29.0
-9.96
Source – clothesline Jy / 01

19. SWOT
ANALYSIS
STRENGTH
OPPORTUNITY
FIBRE
THREAT
LABOUR COST
LIBERALISATION
HUMAN RESOURCE
EXHIBITIONS
POLITICAL UNDERSTANDINGS
POPULATION
NEIBOURING COUNTRIES
PHASING OUT OF QUOTA
SWOT
INTERNATIONAL PRICING
SLOW RESPONSE
ANALYSIS
LACK OF TRAINING CENTRE
PHASING OUT QUOTA
INCREASING COST
REGULAR BUYERS
UNSTABLE POLITICAL
ENVIRONMENT
WEAKNESS
QUALITY
DELIVERY SCHEDULE
ABSENCE OF QUALITY PROFESSIONALISM

20. EXPORTERS
Attitude
PRESENT SITUATION
To change
Quota
Quality, Delivery,lead time
Subsidies
World class Manufacturing
Price
Customer focus, quality, Agility
Transparency
Sourcing
Sourcing
Trust, partnership
Delayed delivery
speed, service
Quality
Strategy

21. POSITIVE SIDE OF INDUSTRY




HAVING GREAT HOPE WITH EXISTING BUYERS &
STILL MAINTAIN THE GOOD RELATIONS
STARTED TO REALISE THE IMPORTANCE OF
TECHNICAL UP GRADATION
STARTED TO REALISE THE IMPORTANCE OF
TRAINED MAN POWER
VERY GOOD QUALITY, ENVIRONMENT & SOCIAL
ACCOUNTABILITY AWARENESS(ISO –9000,14000,
SA-8000)

22. THE ROLE OF
GOVERNMENT

THE NATIONAL TEXTILE POLICY



Aim to develop a strong and vibrant
industry that can produce cloth of good
quality at acceptable prices to meet the
growing needs of the people.
Employment generation
Compete with confidence for an increasing
share of the global market.

23. THE MAIN OBJECTIVES OF NATIONAL TEXTILE
POLICY
To equip the industry to withstand pressures of
import penetration and maintain a dominant
presence in the domestic market.
 Liberalize controls and regulations so that the
different segments of the industry are enabled to
perform in a greater competitive environment.
 Enable the industry to build world class state – of
– the – art manufacturing capabilities in
conformity with environmental standards.


24. The National Textile Policy2000
The endeavor will be



To achieve the target of textile and apparel exports
from the present level of 11 billion dollar to $50 billion
by 2010 of which the share of garment will be $25
billion.
To assist the private sector to set up specialized
financial arrangements to fund the diverse needs of
the textiles.
To set up a venture capital fund for tapping
knowledge based entrepreneurs of the industry,
facilitate the growth and strengthen HRD institutions
like NIFT, NIFT-TEA, NID, etc., on innovation lines.

25. The Highlights of the Policy
Garments



The highly export oriented sector has been taken off
the SSI(small scale industries) reservation list,
enabling corporates to invest large amounts in
garment manufacturing.
The deservation also enables free flow of FDI
(Foreign Direct Investment) to the extent of 100%.
This will prepare Indian garment exporters to face the
fierce international competition that is likely to ensure
once the export quota regime is dismantled.

26. Employment generation






In the light of 2004 regime the exporters are showing
much
interest
with
trained
Fashion
designers,
Merchandisers, Production managers etc,
In the case of fashion designing, so far the industry
people are using the design supplied by the buyers.
Now the awareness of fashion designing is taken place
due to the brand promotion activities.
The new domestic brands are showing keen interest in
developing new designs.
Each and every day the new entrepreneurs are entering
in to the field.
Since the growth export sector is positive, the growth of
the industries which are concentrate the production of
accessories are also increasing.

27. Careers in Fashion Industry











Whole sale Trade
Retail Designing
Opportunities in Fabrics and fashion
Opportunities in Fashion Illustration
Opportunities in Fashion Writing
Opportunities in Modeling
Merchandiser
Quality controller
Production Manager, Supervisor
Fabric Coordinator
Sampling Incharge

28. THANK YOU
manimadhavan@gmail.com
Prepared during 2004-2005