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The Indian Apparel Market

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The menswear market

With a market size of Rs 87,500 crore (US$ 16 billion) in 2012, menswear is the largest segment in the Indian apparel industry, accounting for 42 per cent of the overall pie. In comparison, womenswear takes up 38 per cent, while kidswear comprises 20 per cent of the market share.

Market size and growth projections

The menswear includes woven shirts, trousers, denims, winterwear, , T-shirts, suits, activewear, ethnicwear and dailywear. The woven shirt is the single largest category, followed by trousers and denim. The menswear market is expected to grow at a CAGR of 8.5 per cent over the next five years to reach Rs 1,31,000 crore (US$ 24 billion) by 2017.

High growth categories

Denim, activewear and T-shirts are high growth categories within menswear segment with CAGR of 16 per cent, 14 per cent and 12 per cent respectively. The entire denim market of India hinges around the men’s denim segment, which contributes around 80 per cent to the market. The heightened acceptance of casual or ‘Friday’ dressing, and the penetration of denim into tier-II and -III cities and rural India are some of the factors that contribute to the growth of men’s denim in India. The activewear category primarily constitutes of sportswear, gymwear and swimwear. Increasing health consciousness has made sports, gym, jogging, swimming, yoga, etcetera an essential part of modern life, especially in the metros, as a result of which the demand for activewear is on the rise. Also, the shift from formal attire to comfort-oriented casual attire is driving the market for men’s T-shirts.

Market trends

The urban male is in a phase of transition; he no longer wants to restrict himself to defined styles and silhouette but wants to experiment with the look of the clothing. The demand for occasion-specific clothing is on the rise within the menswear segment. For instance, the modern Indian male can be seen in activewear at the gym; in formal shirts, trousers and suits during office hours; smart casuals in the evening; and in dailywear or sleepwear at night. The demand for ethnic dressing at special occasions such as marriages and social functions is also a trend. Many brands have specifically forayed into men’s ethnicwear to cater to this demand.

The menswear segment is also witnessing an increase in the demand for coloured bottomwear. In addition to the traditional colours such as black, blue, brown and grey, Indian men are also experimenting with newer colours including red, green, orange, etcetera. Almost all domestic and international brands are optimistic about the growth of coloured trousers and denim.

Another interesting trend is the steady growth in the premium tailoring segment comprising the fashion designers and the bespoke or luxury segment. Customers in the super premium segment are willing to pay a premium to ensure that their tailor-made clothing reflects their own personality and also sets them apart from the common crowd.

The womenswear market

The Rs 78, 500 crore (US$ 14.4 billion) worth womenswear market contributes 38 per cent of the total apparel market of India. The growth of this market is more rapid than the menswear market. With the relatively lower penetration of brands, and the growing disposable income of modern women, this segment has become the focus of many Indian and international brands.

Market size and growth projections

The womenswear segment comprises various categories that include saris, salwar kameez, innerwear, blouse, winterwear, sleepwear, tops or shirts, trousers, skirts, denim, T-shirts, etcetera.

Indian ethnicwear, which includes sari, salwar kameez and blouse, is the biggest category within the segment, and it contributes 75 per cent of the entire womenswear market. The market is expected to grow at a CAGR of 9 per cent over the next five years to reach a figure of Rs 1,21, 400 crore (US$ 22.3 billion) by 2017.

High growth categories

Denim, innerwear and tops, shirts and T-shirts are the high growth categories within the womenswear segment, a consequence of the growing acceptance of women’s westernwear in the Indian market. Denim is growing at CAGR of 17 per cent, women’s innerwear at 14 per cent, and tops, shirts and T-shirts at 11 per cent. Denim is penetrating deeper among women in the metros and mini metros, especially among the younger generation. Even working women in smaller cities have shown a gradual acceptance of denim as a casual outfit. The growing focus of retailers and brands on women’s denim will also contribute to its further penetration. The high growth of the innerwear category is driven by the transition of innerwear from a utility-based product to an aspirational one.

Market trends

The demand for women’s westernwear is at an all-time high, thanks to which women’s westernwear is emerging a clear winner in the market. This trend is expected to continue as more women enter into the workforce or aspire to follow the lifestyle of working women. Within working women, there is a clear trend indicating the growing acceptance of women’s dresses and western formalwear. The working women in the metros and mini metros, in addition to traditional saris and salwar-kameez are moving towards dresses, formal suits and business attire. Though these markets are relatively small, yet they are expected to grow rapidly.

Despite the trend of consumers moving away from ethnicwear, some sub-categories within women’s ethnicwear are emerging as promising business opportunities. The demand for contemporary ethnicwear that offers a great combination of trendy look and comfort element is accelerating. The traditional ethnicwear sub-category is witnessing the entrance of a growing number of organised players who assure the desired quality and right fit. The fusion of western style and cuts and even knitted fabrics with basic Indian ethnic designs is another noticeable trend in the womenswear market.

The innerwear category

Innerwear is one of the high growth categories in the apparel market and promises growth and innovation. Innerwear has turned from a traditionally utilitarian item to an essential fashion requirement.

The size of the Indian innerwear market is estimated at Rs 15,870 crore (US$ 2.9 billion); the category is also growing at a CAGR of 12 per cent and is expected to reach Rs 27,900 crore (US$ 5.1 billion) by 2017. The women’s innerwear market, driven by value-added innerwear products, contributes around 60 per cent to the entire womenswear market. The growth of the innerwear category is primarily centred in urban India. The demand for innerwear with higher functionality and greater comfort is witnessing tremendous growth. The market for innerwear product variations such as seamless intimates, plus size innerwear, body shape enhancers, etcetera is burgeoning in metros and mini metros.

The men’s innerwear market

The men’s innerwear market, worth Rs 6,330 crore (US$ 1.2 billion), is characterised by the presence of numerous Indian and international brands catering to different segments of the market. Though many fashion apparel players have extended their existing brand labels in menswear to men’s innerwear as well, the product recall of players with focus solely on innerwear products is comparatively higher.

The various sub-categories of men’s innerwear include vests, briefs and boxers, basic T-shirts, shorts, pyjamas, sleepwear and activewear. Consumers mostly purchase branded products for vests and briefs and boxers which are the largest category offerings from innerwear brands.

On the basis of product pricing, this market is further sub-divided into super premium, premium, medium, and economy segments. The economy segment contributes around 55 per cent to the market, while the mid-price segment makes up 36 per cent; the remaining 14 per cent is contributed by premium and super premium segments. The premium and mid-price segments are expected to witness a higher growth rate within this market. In these segments, the consumer seeks higher fashion-orientation and better comfort, as well as a strong brand name. The younger consumer segment in the metros engages with brands primarily within the premium segment. It has been observed that consumers in the tier I cities play across segments – premium as well as mass segment; however, the premium segment largely fuels the aspiration quotient. In the mid-price and economy segments, value for money, easy availability, and comfort play a vital role in the consumers’ purchase decisions.

These consumers, of men’s innerwear, can be segregated into four groups on the basis of their attitude towards innerwear products and their buying behaviour. These are: Young Aspirers, Discerning Urbanites, Optimistic Pursuers and Corporate Climbers. The Young Aspirer group comprises men employed in high-paying jobs, with high disposable incomes; they are ambitious and demonstrate a keenness to purchase branded innerwear. The Discerning Urbanite group consists of men employed in well-paid jobs, but they evaluate value on a benefit and convenience metric rather than purely on price. They engage with innerwear brands for the promise of quality and show no qualms paying a premium when quality is assured. The Optimistic Pursuer group includes men from smaller cities who are eager to pursue a prosperous lifestyle; they aspire to live a metro-like life and they seek opportunities to experiment with aspirational brands. The Corporate Climber group of consumers comprises men who dream big and are keen to make a place for themselves. They have high aspirations and, thus, they want to engage with brands. But with limited disposable incomes, they are cautious buyers.

The women’s innerwear market

The women’s innerwear market, worth Rs 9,540 crore (US$ 1.7 billion), is one of the fastest growing categories within women’s apparel. This category is growing at a CAGR of 14 per cent and is expected to reach Rs 18,380 crore (US$ 3.4 billion) by 2017. This segment is considered to be more dynamic, with many design variations and the regular introduction of innovative products. Contrary to men’s innerwear where a consumer comes across advertisements for several brands on a daily basis, brand promotion and advertising activities are relatively lower in women’s innerwear.

Price-based market segmentation

The sub-categories in women’s innerwear include brassieres, panties, camisoles, basic T-shirts, shorts, pyjamas, sleepwear, activewear and maternitywear. Consumers mostly purchase branded brassieres and panties which constitute more than 90 per cent of the category mix. However, the penetration of brands is relatively low for other sub-categories such as camisoles, sleepwear and other products.

When it comes to price-wise segmentation, the women’s innerwear market is dominated by products of mid-price and economy segment. These segments together contribute 80 per cent of the market, while the remaining 20 per cent comes from the premium and super premium segments. Like men’s innerwear, the mid-price and premium segments are expected to grow rapidly within women’s innerwear categories also.

On the basis of demographics, behaviour traits, lifestyle activities, and purchase patterns, the typical consumers of the women’s innerwear market can be divided into three distinct categories: Urbane Enthusiasts, Exuberant Seekers, and Thriving Homemakers. The Urbane Enthusiasts consist of young women employed in well-paying jobs who engage themselves with brands. The consumers in the Exuberant Seekers category live in the mini metros and tend to be ambitious and keen to make a mark for themselves. They are normally keen to experience modern retail formats and try aspirational innerwear brands. Consumers belonging to the Thriving Homemaker category generally live in the smaller cities. As homemakers, they do not have high disposable incomes and are primarily value seekers.

Looking to the future

Simply put, the future of the apparel market, and the innerwear category, looks promising. At the same time, fashion retailers have to face some daunting challenges prior to tapping the extant opportunities. Rising real estate costs, increasing power tariffs and supply chain inefficiencies are some of the issues that have to be tackled with utmost prudence. To emerge as a winner in a market marked by the presence of multiple players, brands and retailers need to optimise their business operations by addressing the challenges and harnessing market opportunities. Understanding the psyche of the Indian consumer, amalgamating the Indian style of functioning with western management techniques and tailoring fashion offerings to defined consumer segments are some of the key areas upon which fashion and innerwear players have to focus.

ABOUT THE AUTHOR

is currently working as the Senior Vice President,  Apparel Operations at . He has over 14 years of experience in apparel manufacturing. His key skills include operations consulting with domain expertise in apparel operations, with on-the-ground experience in India, Sri Lanka, Bangladesh, Pakistan and China.