indian textile and apparel

8/8/2019 Indian Textile and Apparel

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Perspective on Indian Textile and Apparel Industry

6th October, 2009

Arvind Singhal

Chairman & MD

Technopak Leadership Forum, Mumbai


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Contents

Current status of Indian textile & apparel market

Evolving domestic consumption scenario

Yet Untapped opportunities in domestic apparel market

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Strategies to develop competitive and sustainable business


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Indias large textile & apparel industry

Indian Textile and Apparel Market

US $ 62 Billion

INR 265,500 Crore

Exports

Domestic Market

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on

INR 93,500 Crore

on

INR 172,000 Crore

Apparel

US $ 10 Billion

INR 43,500 Crore

Textiles

US $ 12 Billion

INR 50,000 Crore

Apparel

US $ 30 Billion

INR 128,500 Crore

Textiles

US $ 10 Billion

INR 43,500 Crore

In last 5 years, total market size has grown 10% Year on Year.

Indias share in global trade is 4%.

Source : Technopak Analysis


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Is growing despite the slowdown

25

Exports market

50

60

Domestic apparel market

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1418 19

0

5

10

15

US$Billio

n

2226

3036

0

10

20

30

40

2006 2007 2008 2011 2014

US$Billion

Source : Ministry of Textiles, Technopak Analysis

(values rounded off)


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. r ven y t e grow ng consumpt on scenar o


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Consumerism is growing

~ 500 Million consumers (excluding

BPL families) across Urban andRural India (18+ years)

~ 270 Million in Rural India

Favorable demographics

Dropping dependency ratio

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~ 230 Million in Urban India

~ 80 Million in the top 100 cities


~ 45 Million in top 30 cities


Rising education levels

Increasing urbanization

Rising Incomes


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Hence increasing discretionary expenditure

40%

4%

27%36%

4%

30% 32%32%

2003 2008 2013

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The share of food and grocery in theconsumers wallet will continue to drop

releasing more money for discretionary

expenditure

20% 20%10% 20%11%5

Food & Grocery

Rent, Utilities & Education

Fuel, Transport &

Communication

Savings & Investment

Discretionary Expenditure

Source : India Consumer Trends, Technopak analysis


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andwidening consumption basket

1. Food and Grocery

2. Clothing

3. Footwear

4. Consumer durables

5. Home linen

6. Movies and theatre

7. Eating out

1991

1. Food and Grocery

2. Clothing

3. Footwear4. Consumer durables

5. Expenditure on DVDs and

VCDs

6. Home linen

7. Home accessories

2009 2015

1. Food and Grocery

2. Clothing

3. Footwear

4. Consumer durables5. Expenditure on DVDs and VCDs

6. Home linen

7. Home accessories

8. Gifts

9. Take-away/ RTE meals

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8. Accessories

9. Gifts

10. Take-away/ RTE meals


12. Eating out

13. Entertainment parks

14. Mobile phones and services

15. Household help16. Travel packages

17. Club membership

18. Computer Peripherals &

Internet

19. Personal transport


11. Eating out

12. Entertainment parks

13. Mobile phones and services

14. Household help

15. Travel packages

16. Club membership

17. Computer Peripherals &Internet

18. Beauty and Spa

19. Gaming

20. Personal transport

21. Coaching / training / learning

22. ?


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Food & Grocery

Need based

A new way of classifying consumption ?

Home? Home dcor

Aspiration based

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Prepared food / food services

Textiles and apparel

Footwear

Medicine & healthcare services

Air travel / public transport

Consumer durables

Consumer electronics

Kitchen appliances

Mobile telephone handsets

500 million consumers decision takers

Education for childrenPersonal transport

Jewelry & wrist-wear (both for women and

men)

Accessories (handbags, pens, others)

Grooming

Well-beingCoaching & learning

Leisure & recreation

Socializing & other lifestyle


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Hence, textile &apparel industry needs

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gears to this fast

changing consumption

scenario


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Many not fully tapped opportunities in the

domestic apparel market


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Women's wear

Ethnic

Wear

2008 Women's WearMarket of SEC A& B is INR

25,300 Crore

64% 61%52%

62% 67% 64%51% 50% 47%

14%

Urban Womens Wear Market7 11 0.7 1 1.5 1 1.5 0.8 4 0.7 1.6 1.5INR

000

Crore

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Formal

Wear

13%

Casual

Wear

22%

Party

Wear

1%

Nightw

ear

17%

47%

36% 39%

5% 5%

48%38% 33% 36%

49% 50% 53%

86%

95% 95%

Urban-Branded Urban-Unbranded



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Fast / affordable fashion for youth .

5

6Children

Women

Casual Wear Market

(INR 000 Crore)

10-15% growth

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More than 50% of the clothes in this category are bought by youth (age 13-30) Increase of buying frequency of casual wear is spurred by:-

Preference for more comfort wear

Increase in employability

Acceptance of Casual wear in work places

12Men



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Kids wear : still very few established players

20%

40%60%80%

100%

300 3250 950 1800 2600 950 3000

Rs Crores

Market size

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I-BodySuits

I-T-shirts Frocks T-shirts Lowers Jeans Ethnicwear

Low Economy Medium Premium Super Premium



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Innerwear .

Innerwear Market14,000 Crore

Mens Innerwear Market(5,500 Crore)

Womens Innerwear Market(8,500 Crore)

Super PremiumSuper Premium

1%

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Low

34%

Men'sInnerwea

r 5500Women'sInnerwea

r 8500

Low

34%


Super premium and premium segment for mens Innerwear is around Rs 500 Crores, very

few players are present in India in this market segment (untapped opportunity)

2%

Premium

8%

Medium

11%Economy

45%

5%Medium

23%

Economy

37%


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Plus size apparel ..

Plussize8%

Rest92%

Plus size % of Indian population

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Potential market for plus size is 8% of

Indian apparel market

However currently only 0.15% of

apparel market consists of plus size

Global players:



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RetailerIn

IndiaSince

Turnover

(RsCrores)

Share of

Apparel

in Total

Active wear /sportswear .

Growth in Store

Numbers of majorsportswear brands

505

675

600

800

Major sportswear brands in India

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Reebok 1995 1148 50%

Adidas 1996 518 45%

Nike 1995 293 40%

Puma 2002 158 30%

180

360

70165 200

325

7 14 36

0

200

400

2005 2006 2007 2008

Reebok Adidas Puma



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International retailers likely to expand firmly in the

next 5 years .

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Value retail : a growing phenomenon

Hypermarket

s

Department stores /

large format stores

Exclusive stores

No. of stores

No. of cities

10

7 58

11

3

27 37

9 19

18

8

45

22

40

218

~140

0~500

41

18

10

438

% share of retail presence across various cities

many retailers already present in smaller cities

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40%26%

67%

46%61%

49%25%

4%

51% 44%

50%

30%

33%

41%

39%

31%

20%

10%

32%29%

10%

9%

5%9%

9%

8%

7%12%35%

8% 11%

45%

78%

10% 15%

Central BigBazaar

ShoppersStop

Westside Lifestyle Pantaloon Raymond Koutons WillsLifestyle

Fab India

Top4 Top15 Top 35 OthersSource : Technopak Analysis


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Strategies to develop competitive &

sustainable businesses


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Service orientation Partnering for growth

Forecasting

s

One stop solution

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Designing

Logistics

Warehousing

Manufacturing

Retailers /

brands

Manufactur

er upp y c a n partners p

IT linkages


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Niche positioning : customized solutions e.g.

Value added Jeans supplier

Formal shirts manufacturer

Value fashion supplier

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Private label supplier Kids wear manufacturer

Lingerie manufacturer

Etc..


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Innovating to survive

ArvindPlanning to make denim salwar-kameez to expand in the

rural market

RBR GarmentsProducing 'novel' garments using mineral fibre, soya bean

fibre etc.

Levi's Selling Jeans on EMI scheme

Examples in Textile and apparel

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Price & Design .....Tata Nano, G.E.

Supply Chain .ITC, Suguna

Manufacturing . Dynamatics, Jain Irrigation

Examples in other industries


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Adopting global best practices

Rs 20 crores savings -

100% increase in Ca acitiesSix sigma

Examples in other industries

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> Rs 100 crores savings

Productivity

enhancements, improved

customer satisfaction

Lean manufacturing

Six sigma

Six sigma


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Developing and attracting manpower

Company Industry Collaboration with Academic Institute

NASSCOM IT & ITES Collaborating with Ministry of HRD to set up

new IIITs

Industry academia collaboration in other industries

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TESCO Retail Runs a Retail Certification course with IIM-

Bangalore

Airtel Telecom Has tied up with NMIMS to train its staff in the

latest marketing techniques

Bharat Forge Aviation Has Partnered with BITS, Pilani to help its

employees attain degrees in manufacturingmanagement

Patni Computers IT Have developed specialized courses in supply

chain management along with SP Jain Institute

of Management



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Environmental sustainability Non - negotiable


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Leveraging FTAs

Benefits

Decreased sourcing costs of

key products included in the

a reements

Country Status

ASEAN Concluded

Sri Lanka ConcludedThailand Concluded

S. Korea Concluded

Singapore Concluded

Indias major trade agreements

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Availability of larger variety of

products for the domestic

market

SAFTA ConcludedAfghanistan Concluded

Bhutan Concluded

Mercosur PTA Concluded

Turkey Negotiating

Australia Negotiating

New Zealand Negotiating

GCC Negotiating

Taiwan Negotiating

EU Negotiating

US Negotiating

Source : Ministry of commerce


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Conclusion

The Indian domestic apparel market offers enormous

opportunity going forward due to various consumption

growth drivers inherent in the Indian economy

A scan of the apparel market throws out some

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important opportunities that companies need to lookmore closely

To tap the opportunities and sustain businesses in this

changing consumption scenario, companies need to

align themselves with the market requirements and

develop required competencies


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Arvind SinghalTechnopak Advisors

Fourth Floor, DLF Tower 8-ADLF Cyber City, Phase II

Gurgaon 122 002 (National Capital Region of Delhi)

Haryana, India

For Further Dialogue, Please Contact :

Tel : (91-124) 454 1111, 288 1111Fax : (91-124) 454 1198, 454 1199

Email : [email protected]

Web : www.technopak.com

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