RESEARCH ON APPAREL FASHION RETAIL INDUSTRY IN INDIA

AMITY SCHOOL OF FASHION TECHNOLOGY
AMITY UNIVERSITY
Project Report
On
“RESEARCH ON APPAREL FASHION RETAIL INDUSTRY IN INDIA”
SUBMITTED TO: SUBMITTED BY:
SHIKHA CHANTIYA VISHWA VARUN
A7820413001
MA-FRM
AMITY SCHOOL OF FASHION TECHNOLOGY
AMITY UNIVERSITY LUCKNOW, UTTAR PRADESH

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Chapter 1: Introduction
Fashion is serious business, everywhere. Admittedly, India was a late comer in the
scene, but the pace now is scintillating. This is testified through the escalating
figures of the garment market as also by the growing tally of fashion brands and
retailers who have occupied substantial share of the country’s retail space. Truly,
the clock cannot be turned back now.
Over the past year, the garment industry has been building up on its capacities at
various levels, expanding its product base, incorporating innovative technology,
and engineering newer avenues of business. This sector, being one of the largest
industrial sectors of the country, is a major propellant of the economy’s growth.
Inherent issues and challenges dominate the industry. With the changing
dynamics of doing business in a rapidly-changing global economic scenario, the
sector needs to identify scopes for potential business ideas and overcome
challenges by converting them into fresh opportunities.
The project aim is to understand how various movements in the economy affect
the garment industry. An in-depth analysis for implications of various government
policies on garment industry has also been done. The project work also highlights
how important is the garment industry to the growth of our economy. The study
also gives insights about the demographics and psychographics of Indian
consumers, the key players in the industry and recent trends in the industry.

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History:
The history of apparel in India dates back to the use of mordant dyes and printing
blocks around 3000 BC. The foundations of the India's textile trade with other
countries started as early as the second century BC. A hoard of block printed and
resist-dyed fabrics, primarily of Gujarati origin, discovered in the tombs of Fostat,
Egypt, are the proof of large scale Indian export of cotton textiles to the Egypt in
medieval periods. During the 13th century, Indian silk was used as barter for
spices from the western countries. Towards the end of the 17th century, the
British East India Company had begun exports of Indian silks and several other
cotton fabrics to other economies. These included the famous fine Muslin cloth of
Bengal, Orissa and Bihar. Painted and printed cottons or chintz was widely
practiced between India, Java, China and the Philippines, long before the arrival of
the Europeans.
Growth of Indian apparel industry:
The industry has already given ample hint of ingenuity, as is evident from the
revival of consumer enthusiasm in the seemingly stagnant menswear segment,
besides remarkable growth in categories like sportswear, casual wear and party
wear. The apparel market has grown 15.5% to INR 1,224 billion .The Indian
apparel industries (including garment retail, fashion designing and accessories
trade) are booming like never before. The rapid increase in job opportunities and
expanding earning capabilities has resulted in the inculcation of a brand new
mindset amongst Indian consumers. Spending on brands is no longer an
improbability, with shoppers willing to pay for quality and premium products. The
apparel industry has benefited immensely from these new market trends.
The country’s organized retail is booming because of increasing private incomes
and changing lifestyles and consumption pattern of consumers is having a positive
effect on the apparel industry. There has been a rapid increase in the market size
of ready-to-wear clothing and lifestyle apparel brands. The clothing and apparel
segment is the largest organized retail category, constituting Rs 21,400 crore of

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the country’s Rs 55,000 crore organized retail sector in 2006.only 19% of this
segment is organized, with a strong potential for still further retail penetration.
The high level of branding exercises undertaken by apparel manufacturers,
retailers and merchandisers across retail formats- such as exclusive outlets, multi
brand outlets, department stores, discount formats and hypermarkets – and the
heightened interest in the franchise route for retail expansion are all contributing
to the rapid growth of apparel retail. Considering the country’s present economic
preference, fashion retail can only continue to grow in direct proportion to the
rising incomes and spending powers of Indian consumers. With about 65% of
these consumers below 35 years of age, apparel retail can only reign supreme in
the marketplace.
Retail in India:
India has been ranked as the top retail destination globally for retail investment
attractiveness among 30 emerging markets in the world. The Indian retail sector is
the second largest untapped market after China.
Retail business contributes around 11 percent of India‘s GDP. Retailing as a sector
is witnessing revolution in India. Retailing in India is gradually becoming the next
boom industry. The growth of India's retail sector not only limited to urban areas
but also growing in rural areas. In the next five years, it is expected that, India's
retail industry will expand more than 80%.
Higher disposable income coupled with favorable demographic changes (Increase
in working women population, rise in nuclear family, largest young population
and higher growth in urban and sub-urban population), changes in consumer
needs, attitudes and behavior, and increased credit friendliness are some of the
key growth drivers for modern retail in India.

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Category wise break up: over all Indian Retail
The total retail market is estimated US$ 545 Bn in 2013.The food and grocery
Segment is largest retail category 70% of total retail market, followed by apparel
sector.
Category 2006 2011 2016 CAGR 2011-16
Food Grocery 217 325 425 5.50%
Apparel 25 35 50.2 7.50%
Jewellery& watches 16.5 25.6 44.2 11.50%
Electronics 16.5 22.7 42.8 13.5%
Pharmacy 8 13.9 23.4 11%
Furnituture 6.5 9.1 17.1 13.50%
Restaurants 4.6 8.8 15.8 12.50%
Footwear 3.6 4.5 8.3 13%
Beauty .6 1.3 3 18%
Healthcare .4 1 2.5 20%
Others 11 23 42.5 13%
Total (US $ Bn) 310 470 675 7.50%
Total market growth years A: 2006, B: 2011, C: 2016

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Chapter 2: Objective
The objectives of the project work are:
 To understand the impact of various government policies on Garment
industry.
 To analyze various opportunities and threats confronted to Garment
Industry.
 To understand the demographics and psychographics of Indian consumers.
 To understand the reasons for India’s recent sluggish performance in
exports for textiles & garments.
 To understand the entire process of garment manufacturing and budgeting
implications at each stage of manufacturing process.
 To study the trends in the apparel industry (Retail, Exports & Technology).

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Chapter 3: Hypothesis
I researched on various aspects of apparel retail industry and governments
policies, as I discussed from history to current market scenario of apparel retail
industry in India. Despite inflationary atmosphere and economic meltdown, major
apparel retailers like Shoppers Stop, Arvind Ltd and Promart have pegged a
healthy like-to-like growth in the range of 12-15 per cent for the first quarter
ended June 30, 2013. Like-to-like growth is the increase in sales from same store
in comparative quarters.
According to industry experts, reasons for the considerable growth amidst
slowdown include a stable maximum retail price (MRP) to increase in promotional
schemes by apparel retailers.
The new financial year has started on a positive note for us with a double-digit
like-to-like growth of 12 per cent. Our momentum of store expansion continues
to be robust with the addition of 20 new stores across all formats this past
quarter.
All the finding and recommendations may be or may not be true; this research is
based on data available as today.

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Chapter 4: Research Methodology
Major segments:
Men:
Women:

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Market Segmentation: Menswear Market
Today menswear market is the biggest segment of the market,howwhere
women’s wear segment is growing faster than other segment of apparel, is
expected to gain majority share in future.Kidswear is also growing rapidly.
Market segmentation: Women’s wear segment
High growth categories in women’s wear market including woven tops/shirts / T-
shirts, Ethnic wear categories sari, salwar kameez also have high growth potential.

Kids wear

Indian Apparel Retail: critical to success factors
Four critical success factors help define the winners in India’s apparel market
Fashion and pricing:
Providing fashion at every competitive price is a major driver of success for
max.Max does not compromise fashion for price and vice –versa. Providing
apparel that beyond normal pricing level has enabled the chain to grow rapidly
both within the group landmark group and within India. Part of offering good
fashion localizing the styling .Max localize one third of its product range sourced
from global headquarters, enable it to “be global and connect local”
The customer experience:
Customer needs and expectations evolve given their exposure to international
travel, media, and the internet. Today the Indian consumer expects a better
experience overall.
Availability of apparel: The consumer wants sharply priced, fashionable apparel
to expand their wardrobe both at workplace or at home.Costomers no longer
wants to dress up just for work place; they also wants to look good at home,
implying access to choice and range.
Store experience: From the time customer enters to the store to when she/he
leaves, he/she must needs to have good experience across several touch points
:Trial room, Interaction with staff, After sales experience, Billing at POS,Ambience
of the store.
Freshness of category:
Freshness takes in count new product promotions, new designs, new colors, new
styling etc.Keeping fashion exciting helps engage and retain customers, results in
sale, generate repeat traffic.

Long-term business model:
Participants need to build a sustainable business model given that the gestation
period of success in the retail sector is long. Sustainable product pricing, offering
products that imply longevity, expanding operations in a calibrated but
determined manner etc are some of the ways in which retailers can convey their
commitment to build a long-term presence.
Market Overview and trends
Supply chain in apparel sector:
Supply Chain Management is the integration of key business processes from end
user to original suppliers that provides products, services, and information that
add value for customers and other stakeholders.
Apparel supply chain:
The Apparel Supply Chain comprises diverse raw material sectors, ginning
facilities, spinning and extrusion processes, processing sector, weaving and
knitting factories and garment (and other stitched and non-stitched)
manufacturing that supply an extensive distribution channel. This supply chain is
perhaps one of the most diverse in terms of the raw materials used, technologies
deployed and products produced.
This supply chain supplies about 70 per cent by value of its production to the
domestic market. The distribution channel comprises wholesalers, distributors
and a large number of small retailers selling garments and textiles. It is only
recently that large retail formats are emerging thereby increasing variety as well
as volume on display at a single location. Another feature of the distribution
channel is the strong presence of ‘agents’ who secure and consolidate orders for
producers. Exports are traditionally executed through Export Houses or
procurement/commissioning offices of large global apparel retailers.

Key players in market
Aditya Birla Group:
Aditya Birla Group is in the league of Fortune 500.It is anchored by an
extraordinary force of 100,000 employees, belonging to 25 different nationalities.
In India, the Group has been adjudged "The Best Employer in India and among the
top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007.
The apparel business of Aditya Birla Nuvo dominates the premium and popular
segments of the Indian lifestyle market with its companies, Madura Garments
Lifestyle & Retail and Peter England Fashions & Retail.
Aditya Birla Nuvo Brands:
 Esprit
 Peter England
 Allen Solley
 Van Heusen
 Louis Philippe

Raymond’s:
A 100% subsidiary of Raymond Limited, Raymond Apparel Ltd. (RAL) ranks
amongst India's largest and most respected apparel companies. RAL entered into
the ready-to-wear business with the introduction of Park Avenue in 1986 catering
to the men's formal wear market. Parx was launched in 1998 to address the
growing trend of smart casuals. In 2000, Manzoni, a luxury lifestyle brand was
launched offering a super-premium formal range of men's shirts, suits, trousers,
jackets, ties and leather accessories. Raymond identified the vacuum for a high
end, casual wear brand and hence decided to acquire ColorPlus as a part of
strategic expansion plan for their ready-to-wear business. Notting Hill was
launched in 2007 to cater to the popular price segment. In addition to this,
Raymond Apparel has also ventured into the kids wear segment with its exclusive
brand Zapp!
Raymond Brands:
 Raymond Finely Crafted Garments
 Manzoni
 Park Avenue
 Park Avenue Woman

 ColorPlus
 ColorPlus Woman
 Parx
 Notting Hill
 Zapp!
Arvind Mills:
Arvind Mills was established in 1931. It was founded by Kasturbhai Lalbhai, one of
the leading families of Ahmedabad. Arvind’s brand portfolio includes: Lee ,
wrangler, nautical, Jansport, Kipling, Tommy, Flying Machine, Excalibur, Arrow, US
Polo , Izod, Pierre Cardin , Palm beach ,Cherokee, Gant, Hart Schaffner, Marx,
Sanabelt. It manufactures denims, shirting, khakhis, knits, and garments. The
company has a turnover of approx $500 million and is a part of over 100 year’s
old Lalbhai group. Arvind entered into exports of garments setting up shirts
factories in Bangalore 2001. This modest beginning has quickly grown to a
capacity of around 4.50 million shirts, annum and the list of customers includes
Dockers, gap, next, Espirit, FCUK, Osh, Kosh and many others. The lalbhai group
subsidiary Arvind Mills said recently that it temporarily suspending expansion
plans for two apparel brands, Rider and Hero, which the company had jointly
developed with the US based branded lifestyle apparel player VF Corporation. The
two companies had signed the JV agreement in 2006 establishing the VF Arvind
Brands to design market and distribute VF’s branded lifestyle apparel in India.

Arvind Brands:
 Flying Machine
 Newport
 Ruf & Tuf
 Excalibur
 Arrow
 Lee
Wills Lifestyle:
ITC’s lifestyle retailing business division has established a nationwide specialty
retail presence through its Wills Lifestyle, a chain of exclusive specialty stores.
Wills Lifestyle, as a fashion destination, offers Wills Classic work wear, wills
lifestyle, as a fashion destination, offers Wills Classic work wear, Wills club life
evening wear and fashion accessories. Wills Signature designer wear. ITC forayed
into the youth segment with the launch of john players in December 2002. The
brand available pan India through a network of over 1300 multi brands outlets.
The launch of Miss Player is currently available at select exclusive stores, select
John Players stores and multi brand outlets. Wills lifestyle currently command
retail space with 50 EBO’s of 2,500 sq ft each and plans to add 50 additional EBO’s
in next two years.
WILLS LIFESTYLE

SUCCESS STORY OF RETAIL BRAND
Pantaloon: India’s leading retailer in multiple retail formats

Shoppers Stop: The leader in diversified market strategy

Growth value proposition:
Ample growth opportunities in the Indian retail industry:
Large number of retail outlets:
 India is the fifth largest preferred retail destination globally.
 The sector is experiencing exponential growth, with retail development
taking place not just in major cities and metros, but also in Tier-II and Tier-
III cities.
Rural markets offer significant growth potential:
 FMCG players are focusing on rural market as it constitutes over 33 per
cent of FMCG consumer base in India
 With increasing investment in infrastructure, retailers will be able to
increase their access to high-growth potential rural market

Private label opportunities:
The organized Indian retail industry has begun experiencing an increased level of
activity in the private label space.
Private label strategy is likely to play a dominant role as its share in the US and
the UK markets is 19 per cent and 39 per cent, respectively while its share in India
is just 6 per cent.
Sourcing base:
 India‘s price competitiveness attracts large retail players to use it as a
sourcing base.
 Global retailers such as Wal-Mart, GAP, Tesco and JC Penney are increasing
their sourcing from India and are moving from third-party buying offices to
establishing their own wholly-owned/wholly-managed sourcing and buying
offices.
Strong growth potential attracting high foreign investment

Recent Merger and Acquisition in the Indian Retail Industry

Key issues in Indian apparel industry
The Multi-Fiber Agreement (MFA) had been forced in India since 1962, governing
the textile trade between various countries. It was later abolished in 2005. When
the MFA was abolished, it was expected that tariff distortions, which were
prevalent earlier, would gradually disappear, facilitating global trade of textile and
apparel. The abolishment of the quotas did fuel growth of the sector with textile
exports growing from US$17 billion in 2005-06 to US$19.24 billion in 2006-07.The
readymade garments segment benefited the most with the abolishment of the
quotas. According to the Apparel Export Promotion Council (AEPC), readymade
garments export from India is expected to reach US$14.5 billion by 2009-10.
Presently, it accounts for 43 percent of total textile exports and six percent of
India’s total export.
Fluctuation Rupee Value:
The subsequent spurt in exports did elude exporters in the segment as most
focused on short-term gains. But with the economy growing and appreciation in
the rupee value, there was a rather different tale to unfold. With an appreciation
in rupee value, the apparel and textile export industry now needs more
introspection to reduce the extent to the blow. Export agreements, which were
conducted in US dollars, faced the most severe blows.
Unemployment:
As per a Confederation of Indian Textile Industry (CITI) study, total employment
generation from exports was at 25.80 lac in 2004-05. The CITI study points out
that with appreciation of Rupee, the growth rate of apparel and textile exports
decreased from 16.6 percent to 9.2 percent in 2006-07; and this has already
reduced employment from the apparel and textile export trade by about 1.22
lacs, and can further lead to an overall loss of over six lacs jobs, unless serious
remedial measures are undertaken to prevent the crisis. Under present
circumstances, it’s estimated that about 2.72 lacs jobs will be lost in direct
employment in the textile and apparel industry in 2007-08.

Though India enjoys the advantage of a host of low costs in textile and apparel
manufacturing, subsidies and supply of cheap labor currently faces threat from its
neighboring competitors- Bangladesh, Vietnam and Sri Lanka. These countries
with minimal cost undervalued exchanged rates, low taxes, subsidies and plentiful
cheap labor could result in sail of the industry to these locations.
Lagging in Cost and Technology Spheres:
Post MFA, exports splurged and substantial capital expenditures were made to
diverse and also re-inforce production capacity to meet the growing domestic
demand. For the short term this may be fine but mere increasing the productivity
was not a solution rather improving productivity and cost efficiency ought to be
the long term goal. In this segment, Indian Apparel and Textiles companies face
threat from low-cost Chinese Companies while negotiating with tough global
buyers.
It has also been observed that the textile and apparel sector witnessed more
investment in existing technology than on new technology. Although
nanotechnology has helped in developing manmade fibers (and filament yarn),
the industry still lags behind it counterparts in the United States, china, Europe
and Taiwan. Import of new and advanced technology could certainly compensate
for the losses on account of exports due to declining dollar.
Existence of long and complex Supply Chains causing lengthening of
lead – time
The supply chain in India is highly fragmented mainly due to government policies
(SSI reservation) and lack of coordination between industry and trade bodies.
Existence of large number of intermediaries adds to the cost but also lengthen the
lead times. The countries who have significantly consolidated their supply chain
are globally competitive – Korea, China, Mexico, Turkey.

Retail scenario
This can be sub divided into brand and non-brand. The branded retail sector is not
more than 10 % of the total. A retailer ( whether shop owner or mall) has to keep
a higher margin for branded garments than for unbranded to take care of returns
on his investments as well as discount on end of season sales or out of fashion
stocks and overheads.
Indian apparel sector trends
Maximum employment with minimum investment. High percentage of women
employment –35 %.95% production in small-scale sector.3% share in global
apparel exports. Cluster based growth –concentrated primarily in 8 clusters, i.e
Tirupur.Ludhiana, Bangalore, Delhi /Noida /Gurgaon, Mumbai, Kolkata, Jaipur and
Indore Contributes around 8% to India s overall exports and 48% to textile
exports.
Production in Apparel Sector:
The apparel sector is expected to record a CAGR of nearly 15% in quantity terms
and 20 % in value terms in 11th plan period. By 2001-12, production is expected
to reach 19 bn pcs , amounting to rs 299300 crs, 32% of this population is
expected to be generated by the export sector.
In value terms, 51 % of the population is expected to be contributed by exports.
The accent is on the value added growth –both for domestic and export market
India in recent years has been the focal point of continuous growth and
development making it one of the fastest growing economies of the world. It is
the 4th largest economy in terms of Purchasing Power Parity, after USA, China &
Japan, and is rated among the top 10 FDI destinations.

The Indian consumer is evolving and driving retail growth due to increased
consumption. Private consumption growth contributes to more than half of the
GDP growth and is growing in double digit figures. Several businesses are reacting
to this evolution positively, both through pull and push phenomenon.
Recent trends
These are few recent trends pertaining to the garment industry
Trend: 1Indian consumers are converting from stitched apparel to ready-to
wear causing a surge in discount retailing.
Factory outlets have become distinct and important shopping destinations
Retailers are increasingly accepting the widely agreed fact that consumer solve a
bargain and always look forward to buying brands at low prices.
Factory outlets have become distinct shopping destinations with distinct
audiences. Apparel companies are focusing on this market to cash in on
consumers converting from stitched apparel to ready-to-wear, further graduating
to branded apparel. India is thus seeing a surge in retailers offering year round
discounts, ranging anywhere between 30% to 70%.
Trend: 2 Consumers now desire branded products in all aspects of their life
Traditionally brands that offered formal wear are now extending into casual wear,
accessories, footwear etc. With most brands turning lifestyle brands, they are
opening larger Exclusive Brand Outlets (EBO’s) to showcase their complete range
of merchandise and give an international feel, The past few months has seen
brands opening up very large format stores in India.

Trend: 3Designers realize the huge opportunities in ready-to-wear market and
are introducing prêt lines
Another trend visible in the Indian designer wear market is corporatization i.e.
strategic tie-ups with large corporate in related industries to provide the
necessary financial support and expertise in operational management. The
designer wear industry lacks the processes, systems, people and financial
resources to rapidly scale up their operations. The direct advantage of this would
accrue to the designers who would be able to concentrate on the design and
aesthetics rather than on business planning.
Trend: 4 Indian companies see a huge opportunity in partnering with luxury
brands wishing to enter India
The Indian consumer desires to possess international luxury brands as an
inspirational product. Additionally, no Indian retail brand actually qualifies to be
categorized as a luxury brand. This readiness for luxury as an organized market
has been recognized throughout the world and international luxury brands are
exploring possible avenues and tie-ups to enter the Indian retail market.
Trend: 5 worldwide surges in demand for organic and eco-friendly products
Organic cotton has been able to achieve maximum popularity amongst all eco-
friendly fibers. Global retail sales of organic cotton products are projected to grow
to $2.6 billion by the end of 2008, reflecting a 40% average annual growth rate.
Hence, the demand for organic cotton fiber is expected to grow to 100,000 metric
tons in 2008, an average annual growth rate of 47%.

Trend: 6 Kids and youth are influenced by icons & characters and desire to
possess them in their everyday life
India has become an important market for character licensing specially in Apparel
Today's consumer is greatly influenced by media and he exhibits a propensity to
follow icons to the extent of bringing them into his everyday life. This growing
trend amongst consumers is being tapped by apparel companies by taking up
licensing of popular characters and icons to be used in their merchandise. This is
especially true for the kids and youth market since they identify with these
characters and icons more strongly. According to Cartoon Network, the business
of license merchandising of animated characters is estimated at Rs. 360 crore in
India.
Trend: 7 Companies are exploring new' locations to retail in order to increase
visibility of their brand
Apparel retailing is geared to take on customers at places other than the
traditional locations like neighborhood markets, high streets and malls. With
increased need for convenience and visibility retailing, companies explore newer
locations like airports, metro stations, restaurants, cafés & even beauty salons.
Retailing at such outlets typically follows two formats - the first is when space is
sublet for retailing branded merchandise at airports, metro stations, etc. The
second kind is when cafés, restaurants, fast food chains sell merchandise to
promote their own brand through T-shirts, caps, bags, mugs, etc. While brand
retailing at airports/metro stations is growing at a fast pace, brand building by
cafés/restaurants through retailing of merchandise will also be an important
trend mostly targeted at kids and youth.
Trend: 8 Textile companies are strengthening front and back end operations
through mergers and acquisitions
Companies are increasingly looking to acquire domestic and overseas companies
which complement the value chain. However, it is the foreign acquisitions which
have caught the attention of the industry and the world. Indian companies are
taking on larger companies, integrating the Indian advantage of manpower & raw
material with the acquired company's strategic location, technology and/or well
established distribution channels.

Role of FDI in single and multi brand retail in India

51 % FDI in multi brand retail (Policy Passed)
 Minimum investment cap is USD 100 million
 30 per cent procurement of manufactured or processed products must be
from SMEs
 Minimum 50 per cent of total FDI must be invested in back-end
infrastructure (logistics, cold storage, soil testing labs, seed farming and
agro-processing units)
 Removes the middlemen and provides a better price to farmers
 Development in the retail supply chain system
 50 per cent of the jobs in the retail outlet could be reserved for rural youth
and a certain amount of farm produce could be required to be procured
from poor farmers
 To ensure the Public Distribution System (PDS) and Food Security System
(FSS), government reserves the right to procure a certain amount of food
grains
 Multi brand retail would keep food and commodity prices under control
 Will cut agricultural waste as mega retailers would develop backend
infrastructure
 Consumers will receive higher quality products at lower prices and better
service
100 % FDI in single brand retail:
 Products to be sold under the same brand internationally.
 Sale of multi brand goods is not allowed, even if produced by the same
manufacturer.
 For FDI above 51 per cent, 30 per cent sourcing must be from SMEs.
 Consumerism of the retail market.
 Any additional product categories to be sold under single brand retail must
first receive additional government approval.

New Goods and Service Tax (GST) would simplify tax structure
Supply chain structure:
 Introduction of Goods and Service Tax (GST) as a unified tax regime will
lead to a re-evaluation of procurement and distribution arrangements.
 Removal of excise duty on products would result in cash flow
improvements.
Pricing and profitability:
 Elimination of tax cascading is expected to lower input costs and improve
profitability.
 Application of tax at all points of supply chain is likely to require
adjustments to profit margins, especially for distributors and retailers.
Cash flow:
 Tax refunds on goods purchased for resale implies a significant reduction in
the inventory cost of distribution.
 Distributors are also expected to experience cash flow from collection of
GST in their sales, before remitting it to the government at the end of the
tax-filing period.
System changes and transition management:
 Changes need to be made to accounting and IT systems in order to record
transactions in line with GST requirements.
 Appropriate measures need to be taken to ensure smooth transition to the
GST regime - through employee training, compliance under GST, customer
education and inventory credit tracking.

Income growth will drive organized retail demand
 Multiple drivers are leading to strong growth in Indian retail through a
‘consumption boom’
 Significant growth in discretionary income and changing lifestyles are
counted among the major growth drivers of Indian retail
 Easy availability of credit and use of ‘plastic money’ have contributed to a
strong and growing consumer culture in India
 Increasing acceptance and usage of e-trailers by consumers due to
convenience and secured financial transactions
 Expansion in the size of the upper middle class and advertisement has led
to greater spending on luxury products and high brand consciousness

Career opportunities in Retail Industry
Several streams of employment are available to students and recent grads
seeking access into the retail industry, each one offering unique opportunities and
requiring specific skill sets.
The opportunities within each of these streams cater to a wide variety of
disciplines. Depending on your interests, there are positions within the retail
industry in everything from fashion to business to marketing to interior
decorating (store design) to industrial engineering (manufacturing) and more!
There is a huge amount of variety within the retail industry and success involves
the understanding of how all the individual pieces fit together.
Most importantly, understanding how all these factors affect the customer at the
consumer interaction stage where the money is actually made.
Logistics and supply chain management:
This is the essential role of getting products from suppliers through distribution
centers and into the customers’ hands. Being able to manage these
interconnected parts becomes a greater concern as the size of the retailer
increases.
Much of the knowledge required for this is includes planning supply routes,
finding affordable methods of transportation and ensuring there are never too
many—or too few—of each product in stores.
Merchandising, marketing and sales:
This can include buying, category management, inventory analysis, planning and
allocation, marketing co-ordination, sales management, business development
and loss prevention.

This particular area has made significant advancements in recent years and can
vary considerably between individual retailers. Technological advancements have
allowed massive amounts of data to be collected, and currently the major issue is
determining the most effective way of analyzing that data.
Having a background or familiarity with interpreting statistics is valuable here.
Knowledge of the customers is key to these positions and being able to interpret
that data will help further that goal.
Operations management:
These roles may include district or store management, and require wide range
knowledge and abilities. They can include recruiting and hiring employees,
managing inventories, implementing promotional strategies, and many other skill
sets which vary across retailers. These operations are the core of the business
and where most of the actual money is made.
The skills required for these positions can vary considerably depending on the
retail outlet. However, a strong knowledge of the retailer’s customer base and
the products are key.
-
General corporate:
These positions are ones most commonly shared by all businesses, such as IT,
accounting and human resources. Within retail, the human resources role may
exist at the corporate level or in field roles that require HR management across
regions, or in large store locations.
Much of these particular corporate aspects of the retail industry are focused upon
in business courses and operate in the same way. This area is often considered to
be the more ‘traditional’ aspect of the industry.
Third-party support roles, including consultants, designers and
manufacturers:
There are many other opportunities within the retail industry that don’t
necessarily involve working for retailers themselves. These include retail
consulting firms, store designers or branding agencies. This can even include

product supplies, such as manufacturers or fashion labels. These types of
opportunities are often overlooked by the assumption that working in the retail
industry means working directly for a retailer.
This stream of employment is ideal for anyone whose education is less focused on
business and more geared toward professions such as engineering in the case of
manufacturing, or architecture in the case of store design.
Entrepreneurial:
There are also opportunities for those looking to use some of their own ideas to
create a business. This could be setting up a fashion boutique, developing an
online business or even opening a franchise location. These positions offer the
most control over your own role within the retail industry, but also involve the
most risk as success or failure largely rests on your own abilities.
Department Manager:
Department managers plan and coordinate the operations of departments or
sections of larger retail outlets. This may include the recruitment and
management of staff, sales and customer service, and managing sales targets and
budgets. They are often also responsible for the visual presentation of the
department and its merchandise.
Visual Merchandiser:
Visual merchandisers design the merchandising plan for a store or group of
stores, in order to maximize sales opportunities by attracting the attention of
customers. They may develop individual displays such as window, wall or point of
sale displays, and floor plans and layouts. These can range from simple product
stands at cash registers to more elaborate and creative window displays. As well
as attracting customers, displays can also project the image of the store and
target specific groups of customers.

Buyer:
Buyers source, select and purchase the goods that are sold in retail stores. They
review current stock levels, sales patterns and their competitors’ ranges of stock
to plan future stock. They can determine everything from stock levels to the
product range. Keeping up to date with new products on the market is very
important, and retail buyers need to do research and attend trade shows to keep
ahead of future trends. This may involve travel to find the most suitable goods for
the industry and for seasonal trends, sometimes interstate and overseas.
SWOT ANALYSIS
S Strength
W Weakness
O Opportunity
T Threat
STRENGTH:
Abundant raw material availability:
India is one of the leading producers of natural and manmade fibers. The
abundance of raw material allows industry to control cost and reduce overall lead
time.
Low cost skilled labor:
India has third lowest wage rate as compared to other key garment
manufacturing companies. This provides industry with a distinct competitive
advantage.

Presence across value chain:
Indian industry has manufacturing capacity present across complete product
range, that allows garment manufacturers to source raw material locally and thus
reduces the lead time.
Growing domestic market:
The Indian domestic market is extremely sensitive to fashion fads and this has
resulted in development of very responsive garment industry.
WEAKNESS:
Fragmented industry
Global buyers prefer to source their requirements from two to three vendors and
Indian garment manufacturers find it difficult to fulfill the capacity requirements.
Effect of historical government policies
The industries continues to be affected by several historical regulations, for
instance there is still an absence of viable exit options for industry players. These
regulations resulted in complex industry structure, which is currently an obstacle.
In the Pre 2000 era garmenting sector was reserved for the Small scale Sector,
which has resulted in most units being set up with small capacities. Till now,
knitted garment sector is reserved for the small scale sector. Though the historical
regulations are relaxed now, they continue to be an impediment to global
competitiveness.

Lower productivity & cost competitiveness
Lower cost competitiveness has hampered ability to compete with lower cost
global players because the labor force in India has a much lower productivity as
compared to competing countries like China, Sri Lanka.
Technological obsolescence:
A large portion of the industry’s processing capacity is obsolete. This has resulted
in low value addition in the industry and a need has raised for significant
technology investments to achieve world class quality.
OPPORTUNITY:
Liberalizing economy:
Opening up of Indian economy has presented the players with lots of
opportunities; Indian companies are tying with global brands. They are leveraging
the brand name of global brands.
Growing dual income:
With number of working women’s increasing the dual incomes are income thus
income available at peoples discrete has also increased.

Rising Disposable Income:
According to McKinsey Global Institute (MGI), by 2035 over 23 million Indians will
number among the country’s wealthiest citizens. Forecasts for India’s real GDP
growth rate over the coming two decades generally range between 6 and 9% per
year. MGI forecast real compound annual growth of 7.3% from 2005-2025.
Average real household disposable income will grow from 113,744 Rs in 2005 to
318,896 Rs by 2005, a compound annual growth rate of 5.3%. This is significantly
more rapid than the 3.6% annual growth of the last two decades.
Sizeable urban middle class:
As Indian incomes rise, the shape of the country’s income pyramid will also
change dramatically. Apart from a substantial reduction in poverty, India will
create a sizeable and largely urban middle class. Middle class comprises two
economic segments - seekers with real annual household disposable income of
200,000 to 500,000 Indian rupees and strivers at 500,000 to 1,000,000 Indian
rupees. In 2005, the Indian middle class was still relatively small comprising
approximately 5% of the population, however middle class is expected to reach
41% of population by 2025.
Fifth largest consumer:
India will become the world’s fifth largest consumer market by 2025. The
combination of rapidly rising household incomes and a robustly growing
population will lead to a striking increase in overall consumer spending. The
aggregate consumption in India will grow in real terms from 17 trillion Indian
rupees today to 34 trillion by 2015 and 70 trillion by 2025 a fourfold increase.
THREATS:
Fluctuation in rupee value:
The fluctuation in rupee value posses a big threat in front of importers and
exporters. The exchange value of Rupee against UD Dollar has depreciated to Rs
61.45 which has resulted in huge losses for the importers. Thus there is always a

great threat for players in international trade. But since it affects only
international players thus it is not as big a threat as some of other threats.
State of Recession in the economy:
The apparel industry gets severely hit during recession because of less liquidity in
the market. This industry is an export-oriented industry which lies in doldrums
during this stage.
Competition from global players:
The major exporters of garments from all over the world are giving tough
competition to India as they are providing higher productivity with lower costs.
Competition is not likely to remain just in the exports space; the industry is likely
to face competition from cheaper imports as well. This is likely to effect the
domestic market and may lead to increased consolidation.
Ecological & Social Awareness is likely to result in increase pressure on the
industry to follow international labor and environmental laws.

Chapter 5: Data Collection
 Apparel Export Promotion Council of India website.
 From the annual report of India Brand Equity Foundation.
 Data available on apparel brands website

Questionnaire
Sample size of survey is 30 people.
Que: Are you aware the current FDI I retail?
a. Aware
b. Not Aware
c. No response
Result: In survey 20 people are aware about FDI in retail, 9 people are not aware about FDI in
retail, the person answer NO response is 1

Que: Do you think the Indian government should open up FDI restriction in the
Retail sector.
a. Yes
b. No
c. We can’t say anything
(Sample size of survey is 30)
Result: After survey I come to conclusion 22 people are saying yes,5 people said
no and 3 said we can’t say anything.

Que: Why participant’s thoughts FDI policy should not be opened?
a. Opening of FDI allows improved market.
b. It will bring change in Indian economy
c. No response
(Sample size of 30 people)
Result: As per result I found that 20 people saying it will bring change in Indian
econom,7 people said Opening of FDI allows improved market and 3 people said
NO response.

Que: Are you happy with current FDI retail policy as it is?
a. Dissatisfied
b. Satisfied
c. WE can’t say anything
(Sample size of 30 people)
Result: After survey I found that 22 people are dissatisfied form current FDI retail
policy,7 people are satisfied and 1 said we can’t say anything .

Chapter 6: Findings
 More R& D work by apparel brands before launching the collection.
 Customer is god for any business, so good connect with customer.
 Quality product, Brands needs to work on perceived value.
 Apparel industry is unorganized; very few companies are in organized
sector.
 Apparel retail industry required huge investment.
 We need to increase export, so our economy will be in better condition.
 Local apparel store need to work on branding and promotion.
 More use of technology technology

Chapter 7: Recommendations
After understanding the industrial and economic scenarios we would like to give
following recommendations to Indian companies operating in garment Industry:
 More emphasis should be given on the micro and macro level economic
factors. These factors indirectly or sometimes directly affects each and
every business in the economy, marketers should be proactive enough to
foresee the future impact of these factors on their business.
 Look for co-branding: It involves merging two or more well known brands
into a single product. It is an effective way to leverage strong brands and
helps in gaining synergy by having the best combination of unique strength
each brand has. Co-branding can be based on innovation, ingredient,
alliance, supply chain or any other.
 Find out new ways of communicating to customers, like sending
information about new products, offers, stocks, etc through SMS on cell
phones Brand page on social media sites.
 Industrialists shouldn’t consider the expenditure on R&D and technology as
a cost, it should be considered as an investment because it pays rich
dividend in future.
 Industrialists must emphasize on improving the standard of labors because
garment manufacturing is a labor intensive industry. The productivity of
industry directly depends upon the productivity of labor.
 Give priority to consumers’ opinion. Keep in touch with customers by
creating loyalty clubs and online data bases and opinion leaders.
 Marketers are under estimating the importance of Visual merchandising,
visual merchandisers not only makes the store look impressive but they
also makes sure right wears are kept at the right place in the store.
 Blend up the bollywood, cricket and other entertainment mix with other
areas such as product design, distribution channel, price, promotion

activities. Using celebrity endorsement can prove effective provided the
credibility and popularity of celebrity is taken into consideration.
 It has been seen in apparel retail stores that mostly In store advertisements
to communicate various promotional offers, thus only that part of
population is reached that is already visiting the stores. Thus using Outdoor
advertising & promotional campaigns is quite important.
 Through research it was revealed that majority of customers prefer to buy
with family members or with friends, and such partners also influence the
purchase decisions of the buyer. Thus it’s necessary to have a strategy to
impress these influencers. Having an associate loyalty card thus should
always be a part of the loyalty program.
 For retails apparel stores its imperative to build their own Brand name they
can’t just rely upon the brand names of the wears available in the stores.

Chapter 8: Bibliography
 Marketing Management By-Philip Kotler.
 Retail Management By-Gibson G.Vegamani
 Data available on website of Apparel Export Promotion Council of India.
 Annual reports of India Brand Equity Foundation.
 Google
 Direct Interview

Conclusion
The trends discussed above clearly show that the fashion business is exploring all
aspects of expansion i.e. it is bound for a multilateral expansion rather than only
unilateral expansion. Multi lateral expansion is happening at every part of the
value chain as well as for every consumer segment.
The Indian Garment Industry is taking cue from international standards as well as
the burgeoning consumer appetite to create their own growth path. Fashion
companies are taking a much larger perspective of this industry in India and
consolidating their position to face it. On the other hand, the Indian consumer is
at a preliminary stage of development and yet due to international exposure
trying to keep pace with the international fashion scene creating unprecedented
pressure on companies to perform.
This is a window of opportunity which the Indian Garment industry should make
the most of before it reaches maturity which will signify slowdown. Companies
need to react as well as participate through in-depth understanding of fashion,
consumer demands & micro/macro level economic factors to take on this
challenge.

Glossary
FDI: Foreign Direct Investment
FMCG: Fast Moving Consumer Goods
FY: Indian Financial Year (April to March)
So FY10 implies April 2009 to March 2010
IT: Information Technology
MoU: Memorandum of Understanding
MT: Million tonnes
MTPA: Million tonnes per annum
SEZ: Special Economic Zone
USD: US Dollar

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