Sectoral Analysis of Apparel Industry

1. Sectoral Analysis
Indian Apparel Industry
Vishal Khatokar
SCMHRD, Pune
vishal_khatokar@yahoo.co.in

2. Introduction
 India is the world's 2nd largest producer of textiles and garments.
 Currently, Indian textiles and apparel industry is estimated to be
worth $99 billion and is expected to touch $223 billion by 2021.
 Indian textile industry accounts for about 24% of the world’s
spindle capacity.
 Abundant availability of raw materials such as cotton, wool, silk
and jute and skilled workforce have made India a sourcing hub.
 Contributes 5.2% to the (GDP), the share of apparels is 40%
 Textile accounts for 27% of foreign exchange inflows & 14% to
industrial production and provides employment to over 45 million
people.

3. Market Size & Segmentation
Shares in India’s textile and
apparel sector in 2012
Apparel Textile
69%
31%
% Share in Total Apparel
Market in 2012
Men Women Kids
40%
25%
35%
Source: Technopak, Aranca Research

4. Share of Apparels in Retail
Source: http://www.citiindia.com

5. Share of Apparels in Online Retail
Source: http://www.citiindia.com

6. Brand presence & Sales projections
Presence of International Brands in Modern Retail
18%
82%
2011
International Brand
25%
75%
2016
Domestic Brand
Apparel Sales & Projection
Export Domestic
145 235
386
273
435
664
2011 2016 2021

7. Market Share: Men’s Wear
Source: Technopak Analysis

8. Market Share: Women’s Wear
Source: Technopak Analysis

9. TOP Apparel Brands
Louis Philippe, the premium
menswear brand from Aditya Birla
Group has not only managed to
top the charts in these department
chains, but with sales of over
1,100 crore during the year ended
March 2013, it is also the largest
apparel brand in India.
Italian fashion group Benetton's
annual retail sales topped Rs 1050
Crore in India, becoming the first
international fashion brand to cross
that mark locally. With this, India
has also emerged as the
largest market for Benetton
outside Europe.
Source: Economic Times

10. Pricing strategy
The price of a product relates to its perceived value. Lower priced
items will expect a higher volume of sales, whilst fewer sales of
luxury products may achieve the same revenue through higher
pricing.
Market skimming- new product has premium pricing to give high
revenues whilst the product is unique in the market
Premium pricing- there is a uniqueness and exclusiveness about
the product so that it can command a high price
Economy pricing- tends to be for no-frills, basic products, here
the cost of manufacture and marketing are kept minimum.

11. Promotional strategy
Direct mail - e.g. catalogues, newsletters received by post or email.
Exhibitions or events – participating high profile at fashion events
Sales promotions - such as discounts, money-off coupons
Public relations - through press or by participating in charitable events
Sponsorship – sponsoring Events & Shows
Product placement - endorsement for the product,
Branding – hiring Brand Ambassadors, layout and decoration of its stores,
its links to music, its advertising campaigns, packaging and point-of-sales
displays

12. Supply Chain Model
Source: http://www.industryweek.com

13. Challenges faced
 Online Retails eating market share of traditional Stores
 Unreliable Sales forecasting
 Seasonality driven sales
 Increased Volatility
 Lack of transparent Supply Chains
 Competition from other Brands
 Emphasis of giant retails on Private Labels
 Rising production costs and flat prices

14. Factors driving Growth
 A Fast growing Young population with high exposure to
international brands & Significant prosperity to spend
Consumers age group of 15-34 years, represents around 35% of
the total Indian population
 300 Million youth would enter work force by 2025
 Massive retail space creation through Malls, Hyper markets &
Super markets
 Boom In luxury retail segment
 Rising purchasing power of middle class consumer

15. India Apparel Market in 2020…..
USD 120 billion plus
In Top 5 markets in the world (7% market share)
Women’s wear (42%) would deservingly be bigger than men’s
wear (39%)
Branded market (43bn) will be bigger than total market today
(40bn)
All major global brands will report India as a major contributor to
sales
Will have few many billion dollar brands and retailers
Few fashion houses will have more than 20 brands’ portfolio
Couple of retailers will have 5,000 plus stores
An online retailer would have crossed billion plus mark

16. Thank You 