Technopak Advisors, one of India’s leading management consulting firms hosted the 2nd Technopak Annual Leadership Forum for the Textiles and Apparel industry in Mumbai. This exclusive, `by-invitation-only` forum provided a platform for 150+ stalwarts from the textile, clothing and apparel retail industry as well as representatives from the Ministry of Textiles, to debate and offer industry perspectives on the state of the regulatory framework, growth prospects and opportunities for the domestic and international market; as well as the key challenges faced by the industry.
A list of senior-level representatives comprising Dilip Jiwrajka, Managing Director, Alok Industries Ltd., Gautam Chakravarti, Executive Director, Blackstone Advisors India Pvt. Ltd., Ashesh Amin President – Apparel and Retail, S.Kumars Nationwide Ltd., B. S. Nagesh, Vice Chairman, Shoppers Stop, Martin Jones, CEO, Marks & Spencer Reliance India, Pradeep Hirani, CEO, Kimaya Fashions and many more, were members of the panel discussions.
One of the highlights of this year’s forum was the Technopak Research Compendium that was released, which showcased some interesting trends. It was observed that: even though currently menswear has a majority share in the apparel market (43%), womenswear is growing at a higher rate of 12% while menswear is growing at 9%. Due to this high growth, womenswear share is expected to reach 43% in 2020 from the current 37% share and kidswear is also growing rapidly with higher growth in the girls’ segment (11%) than boys` segment (10%).
Speaking at the inaugural session of the 2nd Technopak Leadership Forum, Arvind Singhal, Chairman, Technopak Advisors highlighted the growth drivers for the industry, “Growth within the industry will be driven by innovation across product, design and brand, channel and also business processes. Further, it is important for the industry to identify and create new mega clusters – Madurai, Mundra, Ambala and Mangalore, have tremendous potential for manufacturing.”
Singhal further outlined the need for collaborative and more aggressive entrepreneurship, increasing scale through mergers, acquisitions, divestments and bringing forth positive outlook for the industry to attract the best managerial and operational talent to provide further impetus for growth.
The highlights of the panel discussions include:
How can the Textile and Apparel Industry be one of India’s leading growth drivers?
- Unified command rather than a fragmented approach
- Decision by all stakeholders in the textile industry to stop thinking only of exports and enter the domestic sector as a strategic shift
- Encourage growth of organised retail
- Increase awareness and fashion consciousness of Indian Consumers
- Branding India- Need for “Made in India” lobby
- Efficiency in production should be the cornerstone in manufacturing
- Strengthen sourcing, decrease manpower and material wastage
- Credit period to be respected by buyers – providing facilities such as bill discounting on immediate payments
- Leverage Indian craftsmanship to increase acceptance of Indian fashion overseas
The Arrival Of Generation Next
- Vast opportunity in organic farming
- Next decade belongs to India, youth comprising 65% of the population
- Dearth of good manufacturers hence focus should be on manufacturing which in turn will leverage retail growth
- Talent retention is most crucial
Stimulating Indian consumer demand and vision
- Casualwear category is defined by the brands
- International brands have to understand Indian manufacturing and sourcing facilities
- International brands have to design India-centric output to maximize profits
- Indian market is dominated by seasonal expectations
- Shopping experience in tier II cities should be made similar to that of metros to create aspirational value for brands
- Drivers to induce purchase include the creation of aspirational value by building the brand, making it more affordable and more relevant
- Price reduction doesn’t create a brand but value of the brand needs to remain intact
- With the upgrading of the industry there will be automatic premium buying sensibilities amongst consumers
- Price should match quality of the products and services offered
- Ambience and technology play a pivotal role in the purchasing decision
Creating more value for Investors
- The strategy should be sustainability, whether it is niche business or full-spectrum business, premium or value for money business
- An appropriate blend of domestic and export business is critical
- Cost efficiencies are fundamental if the business has to be global
- Investment in a company should not focus on immediate goals, but on value creation, which is created over a lifetime of an investment
- Companies focussing on organic development should have more methodology in growth by testing the markets before scaling it up
- In India, focus to increase on domestic business rather than exports, to avoid currency fluctuations and other such problems
- Execution should be the end strategy, hence investment in people is extremely important
Technopak also released a research report on the Indian Textile and Apparel industry. Some highlights are:
- India’s Textile & Apparel industry (domestic and exports) is expected to grow from the current Rs 3,27,000 crores (US$ 70 Bn) to Rs 10,32,000 crores (US$ 220 Bn) by 2020.
- The Indian domestic Textile and Apparel market size in 2009 was Rs 2,18,570 crores (US$ 47 Bn) and is expected to grow at 11% CAGR to reach Rs 6,56,000 crores (US$ 140 Bn) by 2020.
- Domestic Apparel retail market was worth Rs 1,54,000 crores (US$33 Bn) in 2009 and is expected to reach Rs 4,70,000 crores (US$ 100 Bn) by 2020.
- Home Textile market is estimated at Rs 15,570 crores (US$ 3.5 bn) in 2009 and expected to reach Rs 40,000 crores (US$ 9 Bn) by 2020 growing at 9% CAGR.
- The main drivers of domestic growth are increasing population, increasing income levels, rapid urbanization, improving demographics, increased organized players and increasing penetration of retailers into smaller cities.
- Global Textile and Apparel trade is recovering after a slump during the economic recession in 2008-09, and is expected to reach US$ 1 trillion by 2020 from the current US$ 510 bn. The growth in trade is driven by increased outsourcing of western / developed countries towards lower-cost countries in Asia.
- India has the potential to increase its export share in world trade from the current 4.5% to 8% and reach US$ 80 bn by 2020. The high growth of Indian exports is possible due to increased sourcing from developed countries to Asia and India’s strengths as a suitable alternative to China for global buyers.
- Investments to the tune of Rs 3,20,000 crores (US$ 68 bn) across the textile supply chain will be required by 2020 to tap the potential market created due to the growth of the industry. Investment required in the garment sector by 2020 is to the tune of US$ 14 bn and for processing is US$ 19 bn.