The fashion accessories is a separate market in itself, bringing in considerable amounts of capital and increasing its contribution to the fashion industry year by year. The fashion accessories market of India was observed at US$ 3.4 billion in 2014 and is estimated to grow at CAGR of 12 percent to reach US$ 10.6 billion by 2024. Unorganised players dominate this market, and the share of organised retail stands at a meagre 16 percent for bags, belts and wallets and 45 percent for watches, shares Amit Gugnani, Senior Vice President and Esha Srivastava, Research Associate for fashion at Technopak.
Size and growth of the market
The conception of fashion accessories like most things can be traced down to arise from need-based situations which have now gradually evolved to attain a more want-based significance, adding more value to the overall look instead of just the functionality of an attire. From the ice-age Cro-Magnons fashioning fur hats and sewn lower-leg leggings to body art and ornaments used for camouflaging and to signify various social rituals and occasions, accessorising has come a long way.
Today, fashion accessories is a separate market in itself, bringing in considerable amounts of capital and increasing its contribution to the fashion industry year by year. Modern fashion accessories can be loosely classified into the following key categories – scarves, shawls, stoles, dupattas, caps, hats, mufflers, gloves, mittens, muffs, hosiery, neckties & bows, handkerchiefs, socks etc. (apparel accessories), bags, belts and wallets (leather & other accessories), semi-precious and junk jewellry (fashion jewellry), time wear, eye wear and foot wear etc. The products largely contained in these categories are becoming more and more diversified, expanding the overall portfolio of the segment at a reasonably fast rate.
India has always been culturally rich in terms of textile, handloom and accessories. From maang-tika and bangles to the bindi and dupatta for women and safa, moti-haar and pagdi for men, India brags of an elaborate existing portfolio in this category. In this age of globalisation and with the advent of world fashion, modern and fusion accessories have also become very popular with the younger demographic and are being purchased all over the country.
The market for fashion accessories in India is thriving and is expected to occupy bigger shares in the coming years. One major reason for this promise of growth is the unique quality of accessories of accentuating the overall look of attires. Right accessorising provides multiple options to alter styles through mix-n-match and repeat outfits with a renewed look, all at economical prices. The fashion accessories market of India was observed at US$ 3.4 billion in 2014 and is estimated to grow at CAGR of 12 percent to reach US$ 10.6 billion by 2024. Unorganised players dominate this market, and the share of organised retail stands at a meagre 16 percent for bags, belts and wallets and 45 percent for watches.
Indian consumers are increasingly accepting modern, contemporary fashion accessories as a vital part of their overall outfit choices, which in turn is facilitating the entry of new domestic and international players into the market. Although still a fledgling market, the category of fashion accessories is expected to experience various innovations to become much more dynamic and organised than it is today. In the context of this article, the sub-categories of bags, belts, wallets and watches have been considered as the primary accessory items.
The size of the market for watches and belts, bags, wallets has been observed to increase by a ratio of 2:1 from the years 2014 to 2019. Though the same ratio may not be registered for the second half of the decade, they definitely shall continue to move towards a higher market share and a more organised structure.
Besides the said commodities, numerous other products constitute the accessories market. One such category, jewellry is another promising market registering high growth rates in the category. Since olden times, jewellry has been used by women of all classes and ages to enhance their look and has also held a certain social and ritualistic significance. However, recent developments indicate a considerable shift towards occasion-specific, fashion jewellry. Such jewellry is light in weight and due to its affordability, allows consumers to change their style more frequently. The low brand awareness in the Indian fashion jewellry market hints at a huge opportunity for the organised players to target this segment.
Both demand and supply factors are responsible for propelling this segment towards higher growth rates and revenues:
Demand side factors:
- Positive economic outlook and rising discretionary incomes: India’s economic growth has attracted considerable attention from the developed world. India despite its share of economic instability and fluctuations still remains the most potential market after China. With China’s economy graduating towards saturation, India is being touted as the next big thing. As a result of India’s surging economic situation, the per capita incomes are also experiencing an upward trend leading to higher discretionary incomes at the hands of the consumers. This is the most emphatic growth driver for economy as a whole, including the fashion accessories market.
- Growing eve power: Evolving social scenarios along with the said positive economic development in the country has brought about much-needed and welcome change in how women are viewed in the country. Percentage of parents preferring the girl child and the number of females opting for higher education and subsequently joining the skilled labour force have increased manifold. This growing ‘eve-power’ is responsible for augmenting growth in the fashion accessories segment as accessories are predominantly are made for and purchased or used by women folk.
- Age of the internet and impact of globalisation: With more number of youngsters opting to pursue their higher education abroad and increasing number of young professionals working for major multinational corporations, the overall exposure to various cultures and trends has seen an upward trend. Also, with the advent of the world-wide-web, everything is just a click away, significantly affecting the evolving tastes of the modern consumer and also rendering the global consumer base more and more homogenised as time goes by.
- The demographic advantage: India is one of the youngest nations of the world. Currently standing at 27 years (2015), it is assumed that by the year 2020, India’s median age would be 29 years. India’s youth is better poised today to attain higher levels of education and subsequently join the skilled workforce, thereby affecting the country’s demand and supply and investment, and expenditure. These healthy injections and leakages of capital are fuelling further growth in the economy. The fashion accessories market too enjoying the benefits of India’s young population.
Supply side factors:
- Corporatisation of Indian fashion retail: More aware consumers, rising economic reliability and entry of international players in the industry are causing the market to become more organised and structured. The share of corporatisation in retail, especially in the fashion industry has made a lot of things much easier, leading to higher standards of distribution and marketing and improved levels of quality, product designs and services offered. Visual-merchandising is one important tool employed by retailers to entice consumers of today towards fashion accessories.
- Acceptance of domestic brands: The desire to look fashionable whilst incurring lowest possible costs has made the consumer base of today incredibly flexible. Both branded and unbranded markets and domestic and international players or brands are catering to the fashion-conscious consumers. This trend has developed into the appearance and acceptance of several domestic brands in the segment which too are doing good business.
- Customisation of products: In an economically and culturally diverse country like India, customisation plays a very important role. In spite of the ongoing trend of homogenisation of tastes which is occurring as a by-product of this age, India is still defined by the heterogeneity of its consumer base. With this understanding, brands and retailers have started focusing on customisation of products to suit the tastes and needs of the different consumer segments and regions. Choices vary across price segments and geographical regions. A few brands have launched private labels for fashion accessories in order to cater to the fashion needs of the value-conscious consumers as well. The popularity of fusion wear is another reason for the customisation of products in this category.
- Emergence of new channels: Big brands and retailers operate through multi-channel or omni-channel structures, making the products much more standard and easily available. Also, the emergence of brand-aggregating websites has led to a massive expansion and diversification in the accessories market. Accessories such as bags, wallets, belts, scarves, hats, glasses etc. are heavily promoted on such online channels and the features of ease of purchase, search engine optimisation (SEO) and cash on delivery (COD), free exchanges and returns along with a wide variety of accessories to choose from, make it impossible for the consumers to resist this option of shopping.
Future of accessories market
The various ongoing developments in the fashion retail industry reflect the optimism of the market and indicate immense potential for growth and innovation. Due the impact of global fashion trends and blurring lines between well-defined styles for men and women, accessories are no longer just limited to women. Indian men too have embraced world fashion and have begun to wear more colourful clothes and prints in different styles, and have started demonstrating higher fashion-consciousness and awareness. The areas of high growth potential for the accessories market are tier -I and -II cities for women’s accessories and eventually the smaller towns. The category of men’s accessories needs to be propagated and accepted in semi-urban areas and players in urban areas need to expand and diversify their products and their reach.
The prevalent white-space in the accessories market in India is expected to drive existing fashion brands to diversify their accessories portfolio and shall encourage many other international accessories brands, from mid to super-premium to enter the market and cater to the occasion and need-based demand of the diverse Indian consumer base.
Since the average per capita income of the country is expected to continue rising in the coming years, the middle-class is expected to become more elaborate and diversified, with different levels of income-groups. Besides this, the rich contingent is of the nation is estimated to experience a boon as well. Owing to these developments, the luxury end of Indian fashion accessories market is expected to grow at a higher rate than other segments as the affluent consumer group will increasingly consider fashion accessories as a means to reaffirm its identity and to distinguish itself from the masses.
The share and penetration of corporatised retail is bound to increase and expand which shall lead to better quality and more number of popular designs available to the consumers. As mentioned before, the popularity of fusion wear shall also tapped by producing accessory items across all constituent categories, blending international fashion with traditional Indian styles.
In conclusion, the ability of players to reinvent their product offering and attract consumers through innovation, superior design and style shall determine their success in this category and also the future of the fashion accessories market.