Bags and Accessories - Industry Profile


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The study presents an overview on the handbag market in India. It also provides information on online retail landscape, competitor profile and consumer profile.

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Bags and Accessories - Industry Profile

  1. 1. Handbag Industry Profile 25 July, 2013 Troika Consulting
  2. 2. Presentation Plan  Handbag Industry Profile  Handbag and Accessories Market  Online Retailing Landscape  Competitor Profile  Consumer Profile  Outlook
  3. 3. Bags and Accessories Market Casual Bag Market, India Over 2011 13, online sales of the luggage industry (including handbags) have grown by 80.2%, according to KEN Research Market size, INR crore 4,000 3,500 3,000 • 2,500 2,000 3,673 1,500 1,000 500 Casual handbags dominate the ladies handbag market with a share of 56%, they are followed by office bags at a 27 percent share. 1,716 919 2006 2010 In 2011, the woman’s handbag market was estimated at around INR 2000 crore and expected to grow to INR 4000 crore by 2016. 2015E Margins in handbags and accessories are very attractive; for bags they are around 40 45 percent. Source: Frost & Sullivan • • By 2015, the size of the overall luggage market will rise to INR 10,018 crore, according to Frost & Sullivan • Over 2014 18, the Indian luggage market is expected to grow at a CAGR of 18%, driven by the casual bag segment, according to a recent report by KEN Research According to a recent report by Euromonitor International, the personal accessories market in India is expected to witness double digit growth rates in the coming years. Although, non-branded accessories dominate in the Indian market, the sales of branded accessories are currently growing at a relatively higher pace. Source: Overview of the global luggage market, India Luggage Industry Outlook to FY’2018, Growing market of fashion accessories, KIT: Women's handbags market in India, Madura's key brands go off the beaten track, Personal Accessories in India
  4. 4. Online Retail Landscape (1/3) Over 2012-21 , the total size of the e-tailing business in India is estimated to rise hundred-fold, from USD 0.6 billion to USD 76 billion, according to a study by Technopak Market size, INR thousand crore Retail market size, India Structure of online retail 8,000 5,271 7,000 46% 6,000 54% 5,000 Vertical focused players Multi-category players 3,421 4,000 2,331 2,587 150 187 235 454 2010 3,000 2011 2012 2015F 2,122 2,000 1,000 1,401 Market demands - Unorganised retail 2020F Organised retail Key factors that consumers look for in online retail • • • Currently, online retail constitutes only 1% of the total organized retail market • According to IAMAI, in 2011, online retail sales were INR 3,058 crore, up 25% over 2007. The market is expected to witness rapid growth in years to come Free door-to-door shipping Convenient return process • Multiple payment modes 23% of online shoppers in metropolitan cities choose to pay via cash 60% of the transactions at Myntra are paid via cash Source: E-tailing to touch $ 76 billion by 2021 in India: Study, Trends in India’s e-commerce market, census 2012, Rebirth of e-commerce in India, PwC
  5. 5. Online Retail Landscape (2/3) According to a study by Google, interest in online shopping in India grew by 128% over 2011 12, compared with just 40% growth over 2010 11 Survey responses for top product categories ever purchased online 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% In 2013, according to Google, online shopping will grow exponentially, with apparel and accessories being the hottest categories 84.0% 71.0% 64.0% Apparels & Electronics Beauty & accessories personal care 62.0% 61.0% Books Household products Big fashion retail brands such as Madura Fashion & Lifestyle, DLF Brands, Future Group and Reliance Brands have or are planning to venture into online retail According to a report by Allegro Capital, "Online fashion retailing emerged as the largest segment within the domestic ecommerce, where 52 start-ups attracted INR 3,742 crore in investments from venture capitalists in the past three years. About INR 1,176 crore went into 21 apparel and accessories etailers.“ Apparels and accessories, with 84% responses is the top category for online shopping Also, the frequency of purchase was higher for apparels and accessories (34%) and beauty and personal care (33%) than compared with electronics (28%) In 2013, the online sales of hand bags in India are estimated to be around INR 30 crore, according to an analysis by Troika Source: Google India Study reports numbers about online shopping in India, Apparel retailers log on to e-platforms for growth
  6. 6. Online Retail Landscape (3/3) Indian online retailers setting aggressive targets • By 2015, optimistic to reach INR 5,346 crore in revenues. Currently it offers more than 3000 brands that are shipped over 4000 cities and towns in India • Flipkart revenues for the year ended March 2012 were over INR 535 crore, for 2013 they are expected to rise to INR 2,673 crore. The company has a customer base of four million and ships out more than 50,000 items a day • Myntra revenues have been doubling every 4 5 months over the past year and a half. For the financial year 2013 14, the company is targeting revenues of INR 1,176 crore Year of establishment Reach (million) Penetration (cities) Range (brands) Revenues (USD million) 2004 1.2 1,100 150 20 2007 3 1,200 500 100 2010 3.6 1,200 500 11 2011 0.5 500 NA 30 2012 1.5 500 500 150 Top online retailers Source: Indian Apparel Market, Have Global E-tailers Missed the Bus in India?
  7. 7. Competitor Profile (1/2) The chart below represents some major brands that sell handbags in the category of INR 2000 4000 . It provides an insight across two dimensions average price and fashion quotient. Nine West Mango Medium United Colors of Benetton Caprese Baggit Holii Van Heusen Hidesign Carlton London Low Fashion Style High Zara Lavie Giordano 2000 2500 3000 3500 Average price of handbags Source: Troika Analysis 4000 4500 5000
  8. 8. Competitor Profile (2/2) Competitor Analysis • Over 76 brands are selling bags online in the price range of INR 2000 – 4000 • Little less than half of these are available at multiple online retail websites such as Jabong, Myntra and Flipkart • Major Indian brands offering bags in this range • Baggit, Lavie, Kara, Shwa, Holii (by Hidesign), Lupine, Fabulloso, Hide sign and Bulchee Some brands offering bags near the average price of INR 3000 • Carlton London, Giordano, Kara, Lavie, M ango, United Colors of Benetton and Zara • Minimum and maximum price range of some major brands Carlton London, Giordano, Mango, United Colors of Benetton and Zara • Lavie offers the maximum number (161) of bags online in the price range 2000 – 4000 • Nine West comes second with 137 bags being offered online. The price range is (1950 – 6490) Hidesign (2895 – 6395) Zara (1790 – 4790) Baggit (1325 – 3600) Mango (990 – 4990) Source: Troika Analysis and online retail websites Major foreign brands offering bags in this range
  9. 9. Consumer Profile Small towns and a young population to drive the online retail market in India By 2015, the number of internet users in India will approximately reach three times the number in 2011, according to McKinsey Profile of online users in India, 2012 Percentage Internet users, millions 330 370 120 2011 2015 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 15.3% Female 6.5% 1.3% 1.8% 2.4% 3.6% 45 - 54 35 - 44 23.7% 21.9% 25 - 34 15 - 24 9.7% 55+ Tier 1 and tier 2 cities towns to drive online sales 13.7% Age • Almost 50% of the sales of leading online players such as Myntra and Jabong now comes from tier 1 and tier 2 cities and towns Globally, India has one of the youngest online demographics, this represents a huge opportunity for fashion accessories industry • The proportion of repeat customers from tier 2 and 3 cities is more than that from metropolitan cities • 75% of the online users age between 15 34 • 40% of the online audience are females • According to Accel partners, a Silicon valley venture capitalist, 56% of the online shoppers in India hail from tier 2 cities and towns • 15 24 is the fastest growing online segment Source: Tier-II cities driving e-commerce in India: Accel, Top e-commerce sites report 50 pc sales coming from tier-2 and tier-3 cities, State of e-Commerce in India, ASSOCHAM Male
  10. 10. Outlook Over 2012-15, the fashion accessories market in India is estimated to grow at a CAGR of more than 14 percent, according to RNCOS Major growth drivers • • Growing internet penetration An estimated 180 million broadband users by 2020 Over 800 million mobile subscribers Increasing acceptance of online shopping Currently only 5% of the 200 million credit and debit card holders transact online 150 million of these card holders willing to shop online • Rising purchasing power of consumers in small cities and towns • Increasing fashion awareness among the Indian population • Recent developments The handbag market is witnessing a lot of activity with new launches and expansions. Brands are bullish of the growth in this sector. • Over 2013 14, Hidesign plans to invest INR 20 crore in its expansion plan in India. The brand aims to open 100 exclusive boutiques in 2013. The revenues of Hidesign have been growing by 22 28 percent every year, according to Dilip Kapur, President, Hidesign. • VIP sees a great opportunity, for its latest launched brand ‘Caprese’, in the middle segment of INR 2000-7000. There is currently no dominant player in this range, said MD VIP Industries. VIP aims to be a dominant player in the INR 2,000 crore segment over the next five years • Advertising via social media websites Over 2013 17, Da Milano plans to invest INR 90 crore in expansion. In 2013 itself it aims to open 50 new stores in India. In 2000, 80% of the brands INR 25 crore revenues came from exports. While in 2012, 80% of its INR 135 crore revenues came from the Indian market. Source: RNCOS, The rise of e-commerce in India, IBEF, Hidesign to invest Rs 20 cr in next two years for expansion, eyes 100 boutiques by next yr, Leather goods maker Da Milano emerges as one of the top mid-level retailers in India, Da Milano building a stronger foothold in India, VIP Industries enters ladies handbag category with Caprese
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