India, anti-apocalypse retail

India, anti-apocalypse retail

The textile industry in India

The Indian apparel industry, which is the second largest contributor to the retail industry after the food industry, is immersed in the middle of profound and disruptive changes and of course it grows, not only regarding its level of exports, but also hand in hand with the double-digit growth of fashion retail in the country.

In this previous article – India, a leader in the fashion industry – which I recommend you read, we analyzed India’s leadership in the apparel and footwear fashion industry. Now I have in my hands a comprehensive report in which Amit Gugnani – vice-president of Technopak – an international consulting firm specializing in the Indian textile and fashion industry – analyses current and future growth prospects and trends in the local fashion market. Below, I share some of his interesting reflections and information on a market that is growing annually and has become the anti-apocalypse retail.

India anti-apocalipsis

Overview of the Indian fashion market

The Indian economy is one of the fastest growing economies globally and is of course witnessing major changes in consumer preferences. The increase in disposable income, the introduction of consumers to the world of the brand and the expansion in the use of new technologies and social networks by a population with a millenary culture, are the driving factors of corporate retail in the country. Overall, the Indian retail scenario has shown long-term sustainable growth compared to other developing economies. This has been detected by international brands, which have quickly taken action and have begun to arrive in the country without pause over the past few years.

The Indian retail market is growing at a compound annual growth rate of 10%. The current clothing retail market, with a current value of $46 billion, is expected to grow at a promising 9.7% to $115 billion by 2026.

Profile of the Indian consumer: young and digitalized

India has the world’s largest youth population, which is becoming fashion-conscious due to media penetration, social networks and the arrival of global leaders in the market. This has opened up unprecedented retail opportunities. The promising growth rate of 9.7% makes India’s fashion industry prominent in the retail sector. With a GDP growth rate of 7%, India has an advantage over the developed markets of the US, Europe and Japan, which are expected to grow at a rate of 2 to 3%.

Within the retail categories, apparel sales have shown a comparatively high receptivity to corporate retail. The high penetration of leading companies and brands in the sector in the retail sale of fashion garments and accessories has paved the way for the introduction of innovative processes, more formal procedures and systemic operations in production, purchasing and distribution. As a result, the apparel retail market has been able to take advantage of current global concepts, which lead to better product offerings, careful customer management and the latest organizational techniques and trends in the supply chain.

Inter-segment analysisIndia anti apocalipsis

In the Indian apparel market men have a very important share, reaching 41% of its total. The spending of women contributes almost 38%, while children’s clothing represents 21% of the market. It is estimated that in the next decade the expenditure of women and children will show an increase of 9.9% and 10.5% respectively, which will result in an increase in the market share of these categories. Men’s and women’s expenditures are expected to contribute 39% each to the total market in 2026, while children’s clothing will account for the remaining 22%.

Distribution by region

In ‘India, its textile production zones and infrastructure‘, we analyzed the textile industry in India, the textile factories and their contribution to global fashion. Now we will delve into its domestic trading market and its different regions.

Demand for different categories of apparel varies substantially across the country. The urban market, which consists mainly of metropolitan cities such as New Delhi, Mumbai, Bangalore, Chennai, etc., are the largest garment markets in India and contribute 23% to the Indian apparel market. Considering that almost 70% of the population resides in villages, the greater contribution of cities to the garment market indicates the greater purchasing power of people in large urban centers, their purchasing frequency and the tendency to buy premium and quality products.

Metropolitan cities are home to almost all major national and international brands, driven by the higher purchasing power and knowledgeable population. It is in this same environment where the penetration of Western brands is greater among women. However, many global brands have begun to penetrate smaller cities as well as local brands that are also strengthening their position in these markets. This is due to high costs of commercial property and rental rates, competition between major players and saturation in metropolitan cities. The growing purchasing capacity and the increase in young people’s knowledge of the latest trends in fashion and their brands has led to an increase in demand in the smaller cities and this has led to them brands and companies that have a vision of the changes and are better organized in the country.

The rural garment market in India continues to be served mainly by small and medium local unbranded and unorganized players. The need for clothing and price sensitivity among people in rural India does not make it a lucrative market for big players.

Price segmentation of the garment market

India anti apocalipsis retail-

The Indian apparel market can be divided into super premium, premium, medium, value and low-price segments. The mid-price segment holds the largest share of the apparel market with 29%, followed by the value segment which holds 28% of the country’s apparel market share. The rural population, very sensitive to the price factor, constitutes an important portion, 54%, of the low and value price segments.

Customers from all income groups buy mid-priced garments at different frequencies depending on attire requirement and appearance. Many mid-level Indian consumers prefer mid-price segments, as it offers the guarantee of certain minimum quality standards at a reasonable and affordable price.

The super-premium and premium price categories are value-oriented categories and the product offerings in these segments come from established brands with a long history in the market.

Trends in the Indian apparel market

The fast-growing Indian apparel retail market has generated significant new opportunities for domestic and foreign companies and brands. As a result, the Indian apparel industry is witnessing some specific trends. In later articles we will look at them one by one, but below we list what we consider to be the most relevant trend: responsible and sustainable Indian textile production.

Sustainable and eco-friendly manufacturing

As the country has faced pollution problems, it has reconverted and begun to adopt ecological strategies. The industry is focusing on reducing water consumption and adopting new techniques to avoid the use of harmful chemicals in dyeing, finishing and manufacturing garments, footwear and fashion accessories. The new conscious consumers are much more sensitive and are increasingly familiar with environmental issues, resulting in a growing inclination towards eco-friendly garments. Brands have begun to serve this market, especially in the baby and children’s segments and also in the adult clothing categories.

We hope that they will continue to improve and provide solutions in this regard!

¡Esperamos que sigan mejorando y aportando soluciones en este aspecto!


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