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Retailing In India / The Fashion & Apparel Industry

by Sameer Mathur on Sep 26, 2011

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(NO RUSSIA?) CHINA The significant improvements in reported corporate earnings in the past few years may well reflect two central strands of China.s economic development. The first is the continuing oversupply of labour in the countryside. Although the country has already seen significant surplus rural labour migrate to more productive sectors, this process is far from complete. Theoretically, capital should enjoy a higher rate of return than in countries where the capitalto- labour ratio is higher. The second strand is the significant productivity gains in the overall economy. We have found that total factor productivity (TFP) gains averaged 3.5% per annum during 1978-2004, and accounted for 38% of GDP growth, more than the contribution from capital accumulation. We see these productivity gains as a form of .reform dividend. stemming from policy effort
(NO RUSSIA?) CHINA The significant improvements in reported corporate earnings in the past few years may well reflect two central strands of China.s economic development. The first is the continuing oversupply of labour in the countryside. Although the country has already seen significant surplus rural labour migrate to more productive sectors, this process is far from complete. Theoretically, capital should enjoy a higher rate of return than in countries where the capitalto- labour ratio is higher. The second strand is the significant productivity gains in the overall economy. We have found that total factor productivity (TFP) gains averaged 3.5% per annum during 1978-2004, and accounted for 38% of GDP growth, more than the contribution from capital accumulation. We see these productivity gains as a form of .reform dividend. stemming from policy effort
(NO RUSSIA?) CHINA The significant improvements in reported corporate earnings in the past few years may well reflect two central strands of China.s economic development. The first is the continuing oversupply of labour in the countryside. Although the country has already seen significant surplus rural labour migrate to more productive sectors, this process is far from complete. Theoretically, capital should enjoy a higher rate of return than in countries where the capitalto- labour ratio is higher. The second strand is the significant productivity gains in the overall economy. We have found that total factor productivity (TFP) gains averaged 3.5% per annum during 1978-2004, and accounted for 38% of GDP growth, more than the contribution from capital accumulation. We see these productivity gains as a form of .reform dividend. stemming from policy effort
(NO RUSSIA?) CHINA The significant improvements in reported corporate earnings in the past few years may well reflect two central strands of China.s economic development. The first is the continuing oversupply of labour in the countryside. Although the country has already seen significant surplus rural labour migrate to more productive sectors, this process is far from complete. Theoretically, capital should enjoy a higher rate of return than in countries where the capitalto- labour ratio is higher. The second strand is the significant productivity gains in the overall economy. We have found that total factor productivity (TFP) gains averaged 3.5% per annum during 1978-2004, and accounted for 38% of GDP growth, more than the contribution from capital accumulation. We see these productivity gains as a form of .reform dividend. stemming from policy effort
ndian apparel sales are expected to reach an estimated $25 billion this year, having grown in excess of 10 percent over the past 5 years 1 —a growth rate faster than that of the overall India retail market—and the trajectory is expected to continue [Exhibit 1]. India, Apparel is second largest retail category (behind food and groceries), 10% of total market. Growth driven by: Increase in disposable income By 2005, 21 million of India’s 210 million households already earned more than $4,000 a year, qualifying them for membership in what we call “the consuming class.” Based on McKinsey research, by 2015 the number of consuming class households will likely triple to 64 million New occasions, (of use) Growth in women's segment Fashion as self-expression Plus: further urbanization, comparative youth Rise of Organized Retail Competing in Apparrel: "Shape the category" Innovate occasions: "Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India. Focus on inventory and markdown management. Indian apparel (highest margins table) Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade [For one thing, apparel retail in India relies heavily on sales promotions and special events] 3. Take a segmented View of the Market not just about income, but also lifestyle. RISKS innovation has its risks, including higher markdowns and lower sell-throughs if the new offer or collection is not a hit. And uncertainty on inventory management and ordering in the absence of historical sales data is likely to be the norm. Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between corefashion and high fashion, managing inventory through a proper mix of made-to-order and later engagement rates, and keeping 50 to 60 percent of regularly restocked items at the core have become part of a winning retail formula.
ndian apparel sales are expected to reach an estimated $25 billion this year, having grown in excess of 10 percent over the past 5 years 1 —a growth rate faster than that of the overall India retail market—and the trajectory is expected to continue [Exhibit 1]. India, Apparel is second largest retail category (behind food and groceries), 10% of total market. Growth driven by: Increase in disposable income By 2005, 21 million of India’s 210 million households already earned more than $4,000 a year, qualifying them for membership in what we call “the consuming class.” Based on McKinsey research, by 2015 the number of consuming class households will likely triple to 64 million New occasions, (of use) Growth in women's segment Fashion as self-expression Plus: further urbanization, comparative youth Rise of Organized Retail Competing in Apparrel: "Shape the category" Innovate occasions: "Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India. Focus on inventory and markdown management. Indian apparel (highest margins table) Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade [For one thing, apparel retail in India relies heavily on sales promotions and special events] 3. Take a segmented View of the Market not just about income, but also lifestyle. RISKS innovation has its risks, including higher markdowns and lower sell-throughs if the new offer or collection is not a hit. And uncertainty on inventory management and ordering in the absence of historical sales data is likely to be the norm. Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between corefashion and high fashion, managing inventory through a proper mix of made-to-order and later engagement rates, and keeping 50 to 60 percent of regularly restocked items at the core have become part of a winning retail formula.
Competing in Apparrel: "Shape the category" Innovate occasions: "Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India. Focus on inventory and markdown management. Indian apparel (highest margins table) Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade [For one thing, apparel retail in India relies heavily on sales promotions and special events] 3. Take a segmented View of the Market not just about income, but also lifestyle. RISKS innovation has its risks, including higher markdowns and lower sell-throughs if the new offer or collection is not a hit. And uncertainty on inventory management and ordering in the absence of historical sales data is likely to be the norm. Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between corefashion and high fashion, managing inventory through a proper mix of made-to-order and later engagement rates, and keeping 50 to 60 percent of regularly restocked items at the core have become part of a winning retail formula.
Competing in Apparrel: "Shape the category" Innovate occasions: "Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India. Focus on inventory and markdown management. Indian apparel (highest margins table) Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade [For one thing, apparel retail in India relies heavily on sales promotions and special events] 3. Take a segmented View of the Market not just about income, but also lifestyle. RISKS innovation has its risks, including higher markdowns and lower sell-throughs if the new offer or collection is not a hit. And uncertainty on inventory management and ordering in the absence of historical sales data is likely to be the norm. Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between corefashion and high fashion, managing inventory through a proper mix of made-to-order and later engagement rates, and keeping 50 to 60 percent of regularly restocked items at the core have become part of a winning retail formula.
Competing in Apparrel: "Shape the category" Innovate occasions: "Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India. Focus on inventory and markdown management. Indian apparel (highest margins table) Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade [For one thing, apparel retail in India relies heavily on sales promotions and special events] 3. Take a segmented View of the Market not just about income, but also lifestyle. RISKS innovation has its risks, including higher markdowns and lower sell-throughs if the new offer or collection is not a hit. And uncertainty on inventory management and ordering in the absence of historical sales data is likely to be the norm. Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between corefashion and high fashion, managing inventory through a proper mix of made-to-order and later engagement rates, and keeping 50 to 60 percent of regularly restocked items at the core have become part of a winning retail formula.
Competing in Apparrel: "Shape the category" Innovate occasions: "Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India. Focus on inventory and markdown management. Indian apparel (highest margins table) Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade [For one thing, apparel retail in India relies heavily on sales promotions and special events] 3. Take a segmented View of the Market not just about income, but also lifestyle. RISKS innovation has its risks, including higher markdowns and lower sell-throughs if the new offer or collection is not a hit. And uncertainty on inventory management and ordering in the absence of historical sales data is likely to be the norm. Winners will need to get the back-end operations right much earlier than the scale of the market suggests: managing margin through smarter in-season markdowns, a disciplined balance between corefashion and high fashion, managing inventory through a proper mix of made-to-order and later engagement rates, and keeping 50 to 60 percent of regularly restocked items at the core have become part of a winning retail formula.

Retailing In India / The Fashion & Apparel Industry — Presentation Transcript

Sameer Mathur, PhD ( http://smathur.com ) THE FASHION & APPAREL INDUSTRY RETAILING IN INDIA
FREE TEACHING RESOURCES ON MARKETING MANAGEMENT AT WWW.SMATHUR.COM OVER 130,000 VIEWS FROM 96 DIFFERENT COUNTRIES These presentations are part of Sameer Mathur's teaching portfolio. They are free to view or download for non-profit, academic use. Disclaimer: These teaching materials have been compiled from multiple, non-credited sources for non-profit, academic use. Copyright is retained by the original content creators. Sameer Mathur , Ph.D . Assistant Professor (Marketing) Web: www.smathur.com Email : [email_address] Twitter: @ProfessorMathur Facebook: Click Here
Retailing in India The Fashion & Apparel Industry Sameer Mathur, PhD
- Retailing in India (review)
- Apparel Basics
- Rise of the apparel industry
- Competing in the industry
Segments in India
Segments in India
Top 3 Segments
“ Share -of-Wallet”
Differentiation bases
Shopping is fun
Retailing in India The Fashion & Apparel Industry Sameer Mathur, PhD
- Retailing in India (review)
- Apparel Basics
- Rise of the apparel industry
- Competing in the industry
Retail: Apparel
Retail: Apparel
Retail: Apparel
Retail: Apparel
Retailing in India The Fashion & Apparel Industry Sameer Mathur, PhD
- Retailing in India (review)
- Apparel Basics
- Rise of the apparel industry
- Competing in the industry
The rise of apparel
The rise of apparel
*** to put over picture India Apparel is second largest retail category, 10% of total market (behind Food and Groceries)
The rise of apparel
- Growth driven by:
- Increase in disposable income
- New occassions (of use)
- Growth in women’s segment
- Fashion as self-expression
- Plus:
- Further urbanization
- Rise of Organized Retail
Retailing in India The Fashion & Apparel Industry Sameer Mathur, PhD
- Retailing in India (review)
- Apparel Basics
- Rise of the apparel industry
- Competing in the industry
Competing in apparel industry How to compete: Innovate occassions “ Major jewelry brands have revived a 5,000 year-old “sacred” day known as “Akshay Tritha,” which now accounts for the largest single-day jewelry sales in India.”
Competing in apparel industry How to compete: Focus on inventory and markdown management “ Looking at an index based on the cost of a basic white shirt, we have found that Indian apparel prices have doubled over the last decade”
Competing in apparel industry How to compete: Take a segmented view of the market Not only based on income, but lifestyle… Those in the north spend more, based on approach to social events, for example
Competing in apparel industry How to compete: Balance between corefashion and high fashion
Retailing in India The Fashion & Apparel Industry Sameer Mathur, PhD
- Retailing in India (review)
- Apparel Basics
- Rise of the apparel industry
- Competing in the industry
FREE TEACHING RESOURCES ON MARKETING MANAGEMENT AT WWW.SMATHUR.COM OVER 130,000 VIEWS FROM 96 DIFFERENT COUNTRIES These presentations are part of Sameer Mathur's teaching portfolio. They are free to view or download for non-profit, academic use. Disclaimer: These teaching materials have been compiled from multiple, non-credited sources for non-profit, academic use. Copyright is retained by the original content creators. Sameer Mathur , Ph.D . Assistant Professor (Marketing) Web: www.smathur.com Email : [email_address] Twitter: @ProfessorMathur Facebook: Click Here

Retailing In India / The Fashion & Apparel Industry

by Sameer Mathur on Sep 26, 2011

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Retailing In India / The Fashion & Apparel Industry — Presentation Transcript