Kishore Biyani, chief executive officer, Future Group, had the agenda of “waking up Indian fashion”. The reasons are not necessarily fashion per se, because the traditional category equations are undergoing a change, and according to Biyani, the Indian fashion industry must not be caught sleeping.
- There is a distinct category shift taking place
- Mobile and music players are taking the ‘fashion` space
- Apparel is getting replaced by mobiles as ‘status` and ‘coolness`
- In less than 10 years, mobile industry equals fashion
- Just Bharti`s market cap is three times that of the fashion industry
- Largest fashion company is 1/10th the largest mobile company
The opportunity is huge. And the difference – fashion is unorganized, mobiles are organized. So, why don`t WE organize it, asks Biyani?
There is room for everyone here – from manufacturer of yarn to a retailer. The entire value chain can, and should benefit. The addressable market is going to be worth Rs 200 crore in 2010 and Rs 325 crore in 2014, up from Rs 120 crore in 2005. The share of organized segment is set to touch Rs 30 crore in 2010 and Rs 50 crore in 2014, up from Rs 15 crore in 2005. Meanwhile, the ready-to-wear category is estimated to be Rs 100 crore in 2010 and Rs 235 crore in 2014, up from Rs 45 crore in 2005.
Currently, the l argest capacity in India by a company is just 25 million pieces. To fill the gap, the industry will need 65 x this company`s size. The incremental capacity must increase from 1,285 million pieces in 2006 to 2,860 million pieces in 2010. This means that there is a huge opportunity for everyone, even fabric companies and yarn companies, in addition to garmenting companies and retailers.
Biyani`s counsel is: “ To capture a significant share of this, you need to shed inhibitions of the past. The market opportunity has to be completely exploited, not just at the top, but at the belly and the bottom as well.
” As things stand, “The opportunity is bigger at the belly and even bigger at the bottom. But most seem to be obsessed with the top!
” If one considers the shirts market, about 88 per cent of the market is below Rs 500 and 67 per cent, below Rs 300. Nokia has handsets for Rs 30,000 as well as Rs 2,500. Therefore, “ If we want a higher share, we will have to sell to the bottom too .
”Biyani is characteristically frank: “The industry needs to come together. There is a huge need for consolidation. The industry is far too fragmented.
” To go back to the fashion vs mobiles comparison, there are only about five to six major players for both handsets and service operators, while there are far too many players across the board in the fashion chain.
However, acquisition is not the only way to get big. Biyani suggests, “Get collaborative. Alliances and partnership are the rule of the day, whether it is vertical, horizontal, diagonal, or innovative. Start sharing benefits with others. Get size advantages. This will increase margins, profits, visibility and market cap, helping you consolidate further.”
We have to get our category back into the customer`s mind. He has to feel that if he is not wearing the right fashion, he is uncool ! Fashion needs to have a higher mindshare – through Future Fashion House has formed alliances with various other brands and companies including Scullers, Indigo Nation, Jealous 21, Urban Yoga, Lee Cooper, Liberty , Gini & Jony, Marks & Spencer, Guess, Debenhams, Planet Sports and Etam.
Considering the level of activities and fine-tuning taking place in the indutry, fashion is forecast to increase from Rs 2,000 crore in 2006 –07, to Rs 10,000 crore by 2010-11!