Apparel

SWOT Analysis of the Apparel Industry

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The Indian textiles industry, currently measured at around US$ 150 billion, is expected to reach US$ 250 billion by 2019. However there are several challenges and threats that come in the way of the opportunities as well.

Indian textiles and garments have a story of unique craftsmanship and global demand in the market. Fabrics like silk, cotton, chiffon, Georgette and even denim from India are profoundly admired abroad in a very big way and with the upsurge in Indian design talent Indian apparel has found success in the fashion centres of the world.

Courtesy ODHNI
Courtesy ODHNI

Sectoral Changes

The apparel industry has seen an emergence of plethora of global trends. People have been adapting to new clothing styles. Many global clothing brands have ventured to India and that has contributed a lot to the fashion industry here. Also it has been seen that there is a slow shift from brands and western clothes to Indian designers because change in the income pattern. Puneet Yatin Jain, Directors, ODHNI says, “textile and apparel industry has remained one of the largest employers in India providing bread and butter to over a million of people, especially women belonging to rural areas. The digital revolution, ecommerce bandwagon, and favourable policies like ease of doing business in India continues to ignite the growth of startups in the industry, especially in apparel manufacturing and retailing segment.” As per CARE Ratings, Indian shoppers spent around INR 5,408 billion on buying clothes in 2018, that indicates the rise in disposable income of consumers. In 2019, it is predicted that the growth in private consumption is expected to create a strong domestic demand for textiles. Vikas Gupta, Divisional Chief Executive Officer, ITC LRBD says, “in 2018, the industry noticed a growing concern about climate change and global warming which has led to select players in the industry taking a stand by putting into place business practices which produce low-carbon emissions, use renewable energy to reduce greenhouse gas emissions and create garments with 100% natural fibers to provide quality apparel.”

Courtesy AKS Clothing
Courtesy AKS Clothing

Trend Check

2019 definitely seems to be the year when India is all set to be the global fashion hub. Individuals no longer consider apparels as a sturdy item, to be shopped seasonally; instead, they chase the latest trends. E-commerce platforms are now one of the biggest trends in the fashion industry. More and more brands are moving online giving their users the convenience of choosing and shopping from faraway places which are being delivered at the doorstep. “If we talk about the new trends then the new age millennial have been observed buying the new and trendy products with fusion touch rather than buying the simple clothes as they are very common and can be seen in anyone’s wardrobe and also trends come and go,” says Rishabh Oswal, Executive Director, Monte Carlo. The latest trends highlights mostly on the brand placement. “Celebrity styles are the hot cakes in the market today. Several brands spend 50% of their revenue to retain the celebrities to ensure the brand establishment, because fashion today does not cater to younger generation only, it goes to almost all ages. In India, 9 to 10% of a normal person’s income goes into apparel each year. This sets high expectations and competition for the local manufacturers. With equally good quality and competitive pricing, China, Sri Lanka, Bangladesh, Vietnam trades have increased in India giving a tough turf to fight to the locals,” opines Prem Suganth V.T., Associate Director, Voonik. Sharad Venkta, MD & CEO, Toonz Retail says, “advanced applications of Supply Chain Management (SCM) can be seen in the retail industry, especially in the apparel sector, with the use of Cloud tech to track the operations in a wink.”

Courtesy: Mont Carlo
Courtesy: Mont Carlo

Challenge Factor

The Indian textile industry is greatly fragmented which lead to several small-scale industries. As a result, there is an absence of Industry Leadership. These smaller firms do not have financial resources to invest in technological up-gradation and they are not able to produce economies of scale. “This kicks to an inability to establish a world-class competitive player.  Hence this invites for an instant need for investments in infrastructure improvement and process standardization. Due to poor availability of manmade fibers at competitive prices, India shambles far behind in spite of being the second largest textile exporter in the world,” says Designer Saroj Jalan. Designer Bhavya Bhasin adds, “apparel industry is going through a very rough time, a stiff competition from some international brands coming into India and offering very practical and reasonable price range. Middle income group of India, who are the biggest buyer of textiles/fabrics are shifting their loyalties to the ready to wear brands which are very affordable and manufactured keeping in mind the taste and affordability of this segment.” Counterfeiting is holding back the apparel industry from making significant strides as counterfeit market continues to thrive at an alarming pace. With each fake product sold as a genuine branded product, thousands of brands are affected. “Apart from dented revenues, big brands also suffer from damaged image and reputation because of the fake product’s poor quality. So, there is a need to obstruct counterfeit players if we are moving towards organised clothing and apparel retail. Also, all brands, be it a startup or well-established fashion player, are concerned with costly returns due to sizing and fitting issues. The problem is more disturbing in e-commerce landscape as there’s no standardised sizing chart in India that all brands follow or the shoppers are aware of. Despite having size measurement charts available online, shoppers are not able to choose a dress that would fit them best,” says Nidhi Yadav Creative Head and Founder AKS Clothings.

Courtesy AKS Clothing
Courtesy AKS Clothing

Number Crunching

India’s garment industry is one of the biggest in the world whooping a 1 trillion dollar business. Fabric wise, 80% is cotton, 15% is synthetic and mixed, rest being silk and wool. Out of the entire business, a mammoth 75% is consumed by domestic consumers while the rest 25% is set for exports. The apparel industry employs more than 6 million people directly and indirectly from Fabric manufacturing to sewing/embroidery thread, buttons, buckles, zippers making etc. “The Indian apparel industry has emerged as one of the world’s fastest-growing markets over the past few years and is projected to grow at 15 per cent CAGR till 2022 and become a $102 billion market, as per a recent report. Mobile platforms are expected to influence more than two-thirds of both apparel and fashion accessories purchases by 2022. The growing penetration of the internet, social media and e-commerce is now reaching consumers in tier 2 cities and below, thereby increasing access to brands and products. New operating models such as omni channel and assisted e-commerce could further fuel growth and adoption of online commerce,” says Tanvi Malik, Cofounder, FabAlley & Indya. According to expert reports, about 25 % of the volume of the garment production goes into export markets, leaving 75 % for domestic consumption. “As this specific industry is intensively labor-oriented, especially the activity in production and marketing has now shifted to India and China being leading suppliers as well as markets for garments, it is expected that the robust growth in this segment can be attributed to the rising income levels and job opportunities in the country,” says RP Yadav, Chairman & Managing Director, Genius Consultants Ltd. The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With rising consumerism, disposable income on the rise, increased penetration of organized retail and favorable demographics, the retail sector has experienced a rapid growth in the past decade and witnessed the entry of several international players. High economic growth has resulted in higher disposable income.

This story first appeared in Apparel Magazine’s May 2019 issue here:INDUSTRY INSIGHTS APPAREL INDUSTRY – BINDU

Courtesy AKS Clothing
Courtesy AKS Clothing

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