The Indian retail sector is one of the most exciting and underpenetrated markets in the world, making it the most desirable retail destination as well. The apparel industry is no exception to this phenomenon, and it is estimated to grow at a CAGR of 15 per cent over the next five years. The growing fashion consciousness among consumers has turned the womenswear segment into a lucrative and highly evolving market.
Fashion brands are using marketing strategies to build their brands, increase awareness and create a fashionable, lifestyle-oriented image. One of the factors responsible for this rapid growth are the strong market forces which are making retailers sit up and take notice. The major growth drivers include:
1. Increasing number of women joining the workforce: As more and more women are entering the corporate sector and Indian businesses going global, western formal clothes have seen a great surge in demand. This, coupled by an increase in the purchasing power of consumers, is automatically pushing the demand for womenswear upward. Branded designerwear is also rapidly becoming an important part of the women’s clothing business, with the affluent classes opting for this segment.
2. Globalisation and greater exposure: With increased exposure and global lifestyle infl uences, Indian women consumers have come of age. This trend is most prominent in our ever-growing and aspirational middle class, who now holiday abroad, experience world-class products and services, and are simply not ready to settle for anything but the best.
3. Tier-II cities now emerging as fashion hubs and fashion becoming a form of self-expression: Increasingly, Indian consumers are embracing the idea of fashion as a means of self-expression, and not merely as a functional purchase. Exposure through television, films, and advertising has, in a way, opened our eyes to the world of international fashion and style. This phenomenon is no longer limited to urban cities. Tier-II cities from Chandigarh to Coimbatore are increasingly becoming fashion conscious; retailers and fashion brands are only too happy to comply.
4. The aspirational young Indian coupled with their willingness to spend: Gen Y is impatient, digitally connected, living in real time, and has the spending power. They belong to the age group of 15 to 34 years and are extremely well versed and aware of the latest trends in fashion. So, they demand the same in their lifestyle.
5. Growth of retail space creation in terms of opening of malls, hypermarkets, et cetera: While opportunities are galore, retailers today are trying to figure out the best strategies to face some pertinent challenges. The most critical of these are:
Unorganised Sector: India is a price-sensitive market. Consumers would still opt for economical purchases and often compromise on quality. Hence, the sector is fragmented and largely dominated by small retailers or business owners.
Intense Competition: With an increasing number of international apparel brands entering India, who are vying for attention and a share of the Indian consumer’s pocket, it is becoming exceedingly difficult to maintain an edge over others as well as retaining brand loyalty.
Innovative Strategies: Being innovative and being able to customise marketing or promotional strategies for the brand as per the requirements of the city or region is another challenge that needs attention. While for some big brands the blanket rule works, for the rest, one has to be able to constantly innovate and add that local fl avour to reach out to their target consumers.
Increasing Costs: Managing rising costs like raw materials, real estate space and taxation policies or rates and other establishment costs is an art. Retailers must learn the balancing act and develop a contingency risk management plan that can forecast short-term and long-term trends in order to be better prepared.
Market Trend: As far as the womenswear segment in India is concerned, it continues to be dominated by a huge demand for ethnicwear over western clothes. However, with increasing number of women joining the workforce at top, middle and lower management levels, in the field of media communications, public relations and advertising among others, there is a significant rise in demand for corporate or westernwear for women in the last couple of years, and this trend is only going to swing upwards.
The demand trend also varies with seasons. As far as the trend for womenswear is concerned, summers saw a surge in bright colours, floral prints, neons, laces, stripes, embellished shoes, jackets, etcetera. The highlights of the upcoming fashion trends this winter would be lots of reds and aubergines in all its hues, turtlenecks, knitted scarves, kimonos, experimentation with metallic shades, soft laces with pastel shades along with embellished oversized bags and shoes. While the segment is highly fragmented and unorganised, the retail industry has tremendous opportunities and inherent strengths which foster growth.
1. Strong lineage and manufacturing backbone: Most international apparel brands which are present in India have a strong history and credibility as far as their parent company, manufacturing facility, quality, technology and standards are concerned. For instance, Aviraté is a venture by Timex Garments Pvt. Ltd. operating 22 industrial units in Sri Lanka, Bangladesh and Hong Kong. With their strong design team based in the U.K., the brand brings in the latest trends and designs inspired by the catwalks of London, Paris and Milan.2. Conducive government policies: The Government of India has approved nine foreign direct investment (FDI) proposals amounting to `1,140.14 crore (US$ 208.82 million), based on the recommendations of the Foreign Investment Promotion Board (FIPB). Foreign retailers can now enter India by forming a joint venture (JV) company that could have multi-brand retail stores. Additionally, with the government allowing FDI up to 51 per cent in multi-brand retailing (with prior government approval) and 100 per cent in single-brand retailing, further liberalisation of the sector is expected, thereby attracting foreign investment.
With an estimated 300 million youth entering the labour force by 2025, the retail arena is only going to get more challenging and exciting with brands battling it out for the consumer’s mindshare and pockets.