Industry Introduction & Overview
Porter’s Five Forces
Indian Textile Industry - Introduction
The Indian textile industry is one of the largest
in the world.
Currently contributes to 27% of India`s total
foreign exchange and to around 4% to the
GDP of the country.
The industry employs more than 35 million
The textile is the largest single industry in
India, accounting for 20% of the industrial
Broader Classification of textile industry :-
Total global textiles exports was to the tune of
US$ 772 billion in 2013, with India’s textiles
exports at US$ 40 billion (5.2% market share)
The country's textile industry, is currently
estimated at US$ 108 billion
The current industry size comprises domestic
market of US$ 68 billion and exports of US$ 40
GLOBAL TRADE IN TEXTILE & CLOTHING SECTOR
VALUE CHAIN AND MAJOR SUPPLIERS
Values in Billion US$
Country 2012 2013 % CHANGE
China 97.83 108.97 11.39%
EU(28) 30.26 31.87 5.31%
India 19.94 22.14 11.06%
United States 21.77 21.78 0.04%
Germany 15.44 15.97 3.43%
Italy 13.65 13.97 2.38%
South Korea 13.66 13.81 1.11%
Turkey 11.65 12.77 9.57%
Taiwan 11.05 10.93 -1.06%
Hong Kong 10.66 10.87 2.03%
Pakistan 8.19 8.24 0.58%
WORLD 323.34 337.73 4.45%
The world export trade in Textiles
reported a marginal growth of 4.45%
rising from US$ 323.34 Bn to US$
COMPANY BUSINESS AREAS
Welspun India Ltd Home Textile, Bathrobes, Terry Towels
Vardhman Group. Yarn, Fabrics, Sewing Threads, Acrylinc Fiber.
Raymond Ltd. Suiting ,Tailored Clothing, Denim, Shirting, Woolen
Alok Industries Ltd. Home Textiles, Woven and Knitted apparels Fabric,
Garments and Polyester yarn
Arvind Mills. Spinning, Weaving , Processing and garment
production (denims, shirting, khakis, knitwear)
Bombay Dyeing & Manufacturing Company Ltd. Bed linen, Towels, Furnishings, Fabric for suits,
shirts ,dresses & Saris in cotton and polyester
Garden Silk Mills Ltd. Dyed and Printed Fabric.
Mafatlal Industries Ltd. Shirting, Poplins, Bottom wear Fabrics, volies.
Aditya Birla Nuvo, a diversified conglomerate of
Aditya Birla Group, comprising Three divisions—
Madura Garments, Jayashree Textiles & Indian
Madura Garments- Lifestyle market (Louis Philippe,
Van Heusen, Allen Solly, The collective)
Jayashree Textiles- Domestic linen and worsted
Indian Rayon- Viscose filament yarn.
ITC Lifestyle Lifestyle Market
Reliance Industries Ltd Fabric and formal wears.
Key Players in the Textile Industry
Raymond Apparel Ltd - Introduction
Recognized as the most respected textile company of India, Raymond limited is amongst the first three fully integrated
manufacturers of worsted suiting in the world.
As the flag-bearer of the multi-product, multi-divisional Raymond group, it enjoys over 60% share of Indian worsted suiting
It produces 25 million meters of high value pure wool, wool blended and premium polyester viscose suiting in addition to
half a million blankets and shawls, all marketed under the flagship brand “Raymond”-a worldwide trusted name since
It also produces and markets plush-velvet furnishing fabric in wide array of design and colors including carpeting for the
niche markets of India and Middle East.
Pioneer in creating and building homegrown
Raymond Apparel Ltd-Introduction
The company has a diverse product range of nearly 20,000 designs and color of suiting fabric.
They export there product to over 55 countries including USA, Canada, Europe, Japan and the Middle East.
The company has a revenue of more than US$ 230million (2013).
Their suiting`s are available in India in over 400 towns through 3,000 retailers as well as over 500 exclusive
Raymond was ranked 23rd among India's most trusted brands according to the Brand Trust Report 2014 .
Porter’s Five Forces
Power - Low
Power - Low
New Entry -
Porter’s Five Forces
Threat of New Entrants:
• Low barriers in the domestic market.
• Economies of scale are high.
• Brand identity of a company in this industry is high.
• Capital requirements to establish a regional or a
national level operation are high.
• This industry is not lucrative.
• The companies operating at the national level do
manage to make economic profit but entry barriers at
this stage are very high.
• High capital requirement is not an issue for the
international players and thus the entry of strong
international brands in the domestic market is inevitable.
• Thus the threat of new entrants is moderate.
Bargaining Power of Buyers:
• High demand for apparels and home textiles in Us
and Eu markets.
• Product differences and brand identity are quite
• Buyer concentration is very low.
• Buyer volume is generally low.
• Buyer information is high.
• Ability to backward integrate is very low.
• Thus the bargaining power of buyers are low.
Porter’s Five Forces
Bargaining Power of Suppliers :
• High availability of cotton.
• Low cost of labour.
• Differentiation of input is pretty low.
• Presence of substitute inputs to cotton like polyester ,
wool, lycra etc are present.
• Importance of volume to suppliers is very high.
• Cost relative to total purchases in industry is low.
• Thus bargaining power of suppliers is low.
Threat of Substitutes:
• Competition from low cost producing nations like
Pakistan and Bangladesh.
• The threat of substitution from the garments
provided by the unorganized sector is high.
The Degree of Rivalry :
• Fixed costs are high in this industry.
• Product differences are high.
• Brand identity is high.
• Exit barriers are also high for the national level
• Thus the degree of rivalry in this industry is high.
• The Government has announced the release of a
subsidy of US$ 533.87 million for the textile industry.
• Removal of trade related tariffs and non-tariff barriers
• The government has extended 10% capital subsidy
and 5% interest subsidy on installation of machineries
and for processing machinery.
• A 41-member Working Group has also been
announced to be set up with a National Fiber Policy, to
ensure self-sufficiency in fiber consumption and export
requirements in India.
• Indian textile industry contributes about 14% to
industrial production, 4% to the country's gross
domestic product (GDP) and 16.63% to export
• Nearly 40% of the textiles produced in the country is
exported and the textiles sector is the biggest
employment generator after agriculture
• The sector is expected to generate 12 million new jobs
• Indian textiles and apparel exports, which is worth US$
22 billion, is expected to register a four-fold increase to
touch US$ 90 to 100 billion in the next 25 years.
• The market for textile is growing as a whole as India’s
population grows at about 1-2% annually.
• Along with that, Raymond’s market segment of upper
middle class and the high class segment is also
growing due to higher disposable incomes.
• The textile industry is mainly a labor intensive industry
as it provides livelihood to the huge population, mainly
consists of unskilled workers, and thus plays a pivotal
role in the development of any economy.
• Since the textile industry is more labour intensive,
technological factors do not affect it too much, however
since the government extends 10% capital subsidy and
5% interest subsidy on installation of machineries and
for processing machinery under the TUFS, the textile
industry can easily make advancements in technology if
it needs to.
• Basic advancements in technology for the textile
industry include improvements in machinery for
computerized flat knitting and embroidering.
Leverage and Liquidity
Raymond 3.93 5.05 1.63 0.75 1.13
Bombay Dyeing 2.65 12.88 0.77 0.18 0.73
Vardhama 4.80 7.64 2.35 0.60 0.92
Arvind 4.51 7.78 1.43 1.76 1.08
AxisTitle Management Efficiency, Liquidity and Leverage
OP Margin NP Margin
Raymond 6.47% 3.03% 12.89% 2.36%
Bombay Dyeing 1.66% 0.96% 9.20% 0.92%
Vardhama 24.44% 12.70% 23.68% 12.41%
Arvind 11.00% 5.28% 14.38% 4.14%
Raymond – SWOT Analysis
• Strong R&D for product innovations like dress shirts, shirting's, jeans wear, tailored
• Loyalty of customers and high product quality
• Loyalty of employees due to decentralization
• Being MNC company, it has ability to attract large customers as compared to local
• Owns 550 stores across 200 cities in India and overseas.
• Global penetration is limited as compared to other international brands
• Switching cost is low for customers since Indian and international firms offers large to
• Weak supply chain management
• Inconsistent execution
• Collaboration with foreign players because of a national brand
• Special offers for corporates and business institutions
• Global expansion would give more opportunity for brand to grow
• Changing rules and regulations in the fabric industry
• Increase in competition in domestic market due to large number of formal wear brands
• Regional trade alliances – All major players in the industry are competing with each other
not only on low price but better quality.
• Increase in social and ecological awareness , company will be in constant pressure to
follow labor laws and environmental laws
Women segment is relatively new, which is 35% of the total domestic market, this part of
market should be focused upon.
Focus on accessories.
To expand to international markets-starting with areas with a sizable indian population.
To eliminate the philosophy that only the quality of the product will create demand and start
brand building exercises for all the Raymond App ltd brands.
To increase the consistency of advertising and also increase the number of brands for which
ads are run.
6. ANNUAL REPORT OF 2013-2014 OF TEXPROCIL.
7. REPORT BY CORPORATE CATALYST INDIA PVT LTD. http://pib.nic.in/newsite/erelease.aspx?relid=:105349