SWOT Analysis of Indian Textiles and Clothing Industry & Changes in Lifestyle of Indian Consumer o By: Anna Sunny Anshu Yadav Pankhuri Bhardwaj Poorti Sangal Rituparna Neog Subhasmita Panigrahi
Contents : SWOT Analysis of Indian Textile and Clothing Industry Changing lifestyle of the Indian Consumer
A brief introduction to Indian Textiles and Clothing Industry• The history of textiles in India dates back to the use of mordant dyes and printing blocks around 3000 BC. The diversity of fibres found in India, intricate weaving on its state-of-art manual looms and its organic dyes attracted buyers from all over the world for centuries• Apart from providing one of the basic necessities of life, the textiles industry also plays a pivotal role through its contribution to industrial output, employment generation, and the export earnings of the country• It contributes about 14 per cent to industrial production, 4 per cent to the GDP, and 16.63 per cent to the countrys export earnings.• The Indian textiles and apparel industry has an unbalanced structure, 95 % of the industry is the unorganized and only 5 % is the organized.
BUYING POWER• By 2015, India’s consumer market will be as big as Italy’s, and will grow into the fifth biggest worldwide 10 years after that.• India’s expanding middle class has prompted big Indian conglomerates such as Tata, Reliance, and Bharti to expand into retail.• Foreign brands such as Nike, Samsung, and Sony have tied up with local players, and Wal-Mart is entering the fray via an alliance with Bharti.• Now, FDI into retail would change Indian consumer’s buying pattern forever.
Indias Position in Global Textiles and Clothing Industry • Indias position in the World Textiles Economy - Second largest producer of raw cotton. • Second largest producer of cotton yarn. • Second largest producer of cellulosic fibre/yarn. • Second largest producer of silk. • Fourth largest producer of synthetic fibre/yarn. • Largest producer of jute.
• The Indian textiles industry is one of the largest textiles industries in the world.• With the abolition of quotas in 2005, Indian Textiles and Apparel exports grew by 19% to reach US$ 17 billion in 2005-06. Indian exports increased in both the major destinations of US and EU.• Indian exports to US increased by 27% to reach US$ 4.6 billion, while exports to EU increased by 18% to reach US$ 6.2 billion• On the account of increasing exports, most of the Indian companies experienced healthy growth in their top and bottom lines. The exports of Textile and Garments have reached to US $ 19.2 billion in 2006-07.
The major sectors of the textiles industry include:• Organized Cotton/ Man- Made Fibre Textiles Mill Industry• Man-made Fibre/ Filament Yarn Industry• Decentralized Power-looms Sector• Woollen Textiles Industry• Silk Industry• Handlooms Industry• Handicraft Industry• Jute Industry
• 1.Strong cotton base• 2.Strong entrepreneurial class• 3.Flexibility in production of small order lots• 4.Presence of integrated i.e. concept to consumer.• 5.Ability to handle value additions, embellishments etc.• 6.Adequate labour supply at relatively competitive wages• 7.Good "cultural" comfort with US and Europe• 8.Growing Domestic Market
• 1.Poor work practices resulting in higher labour cost component in many staple garments, in spite of low labour costs• 2.Rigid government labour policy and lack rationalization of duties in MMF.• 3.High transaction and power cost• 4.Too much emphasis on cotton, synthetic fibre base not equally developed• 5.Fabric/processing still to gear up to meet international standards• 6.Technological obsolescence and lower efficiencies• 7.A lack of strong linkages between raw material supplier and the apparel manufacturer.• 8.Highly fragmented, unit production capacities very low in international standards
• 1.Quotas carried on in China after 2005.• 2.Good political equation with EU and US.• 3.Improvements in infrastructure and regulations.• 4.Research and product development• 5.Buyers preference for India, after China• 6.Understanding buyers need because of language advantage
• 1.Rupee appreciation in last few months.• 2.Trade blocs and partnerships at the exclusion of India.• 3.Location disadvantage: long transit time to key markets.• 4.Pricing pressure, following opening up of quotas• 5Enhanced competition from other countries similarly constrained by quotas.
Introduction• Phenomenon of changing demographics and income levels, which leads to their new and revamped lifestyle. In the recent times, India has been facing a sea of alteration in every sphere.• While the family structure is modifying and shrinking from joint to nuclear, income has heightened, leaving consumers with increased disposable income.• Consequently, the wish list and aspirations of consumers is not inert but is ever changing.
1. “Easy on Pocket” Aspiration• With the improving economy the consumer is again looking for better products and services. However after witnessing recession in full swing he/she is now even more value conscious.
2. Compassionate Consumer• Indian consumer is now becoming more receptive to the goodwill of the society at large• consumers are positively responding to products and services which have a generous component; especially those, portions of which would be donated to a worthy cause.• Consumers have now begun to favor ethical and eco friendly products, starting from Ahimsa silk; vegan belts and footwear to environment friendly electronic goods such as LED bulbs by Philips etc.• Procter & Gamble and UNICEF have joined forces for the fourth year running, in an effort to raise money for tetanus vaccines, etc
• The brands consumer wears, eats, drives, uses or experiences are connected to his/her status.• Catering to the demands of consumers, various brands have tried to offer goods and services that help consumers to alleviate their anxieties about how they are perceived by others.• . Status is also associated with the number of connections one has or the level of involvement in the networking site.
5. Increasing Alertness• With escalating crime rates and increased threat of terrorist attacks there is enough reason for the modern day consumer to demand security services and products that are effective and comprehensive• The far more vigilant and meticulous consumer now wants to invest liberally in the safety and security of his home, possessions, and most importantly, his loved ones.
6. From Conventional to Bold• The consumer today, is moving away from traditional, social and familial structures and feels that now its time to loosen up. The more experienced and outspoken consumer is appreciating brands that are enterprising, candid and even a bit more risqué.• The broad spread of more liberal attitudes and increasing urbanization has given birth to savvy streetwise consumers who do not hesitate in trying products that push the boundaries.
7. Desire for Fringe Benefits• Consumers have actively started looking out for products and services which provide them with “on the plate” benefits.• Hence, any bit of information/ service that serves as an instant assistance to the consumers and help them to make the most of their daily lives, would pleasantly surprise them .• . The current mobile online revolution is shifting consumer expectations further into the always-on, instant gratification online arena
8. Not YetRetired ! • The current day older generation is fast emerging as an exceptional genre with new desires and anticipation and are increasingly showcasing “Life begins after retirement” attitude. • They look forward for ways to enjoy and “LIVE” their life without strings.
Other Prevalent Consumer Trends :• Value emerging as a ‘price plus’ proposition• Enhanced services perceived as differentiator• Shopping time together is defined as together ‘family time’• Time paucity & convenience need shall drive ‘all under one roof’ formats• Emergence of family malls, large apparel formats, hypermarkets• Attractive investment in Hypermarkets and Cash & Carry• Growth opportunity for brands and private labels• Increasing career women : Estimated 40 to 45 million across age of 20 to 40 years in Urban India over next 10 years• Create brands around evolving lifestyles & activities• Increased self spending power & freedom (career women)