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Fashionable on the Inside: Analysing the Indian innerwear segment

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The innerwear market has come a long way in India. From being just a functional wear category to becoming a fashion quotient, the segment has brilliantly created a niche for itself. With the rising incomes, passion for fashion and need for comfort, innerwear, today, is among the fastest growing fashion segments in India.

The Evolving Market

Traditionally, innerwear was an unorganised market in India. It still is, to a certain extent, dominated by a large number of small-scale players making ~60-65 percent of the market fragmented and unorganised. However, the market segment is evolving gradually and moving towards organised retail. “The innerwear industry is highly fragmented, with too many players in every price segment. The category is still largely unorganised, with organised players just forming one-third of the market. There is an influx of new entrants with international brands and online labels, which has help increase the share of organised business, and this will grow at a faster pace than before,” says Smita Murarka, Head – Marketing, amanté.

But the market as well as the consumer is changing at a rapid pace. Today, Indian consumers are fast gravitating towards innerwear that are not just functional but has a style quotient that reflects their individuality. Initially it was a damp market marred with lack of both products and product awareness. But new age customers exhibit evolved characteristics which has led to bolstered consumption patterns. With modern trends and product innovations, innerwear has turned to be an essential fashion need. “One of the main reasons for the growth of Indian innerwear market is because of the increasing size of the organised market and the declining share of the unorganised market. This factor has also been instrumental in paving way for the various independent brands that are emerging as the key players in the market,” says Saket Todi, Senior Vice President, Lux Industries.

With a variety of silhouettes in their outerwear, consumers now need to experiment with their intimate wear choices. From t-shirt bras to strapless bras, thongs to full briefs, the choices are multiple now.

“Earlier innerwear companies would have 2 or 3 types of vest. Today if you pick up any brands’ catalogue there will be plethora of designs and styles and for each product there would be numerous variations. The colour pallet has expanded,” explains Sanjay Kumar Jain, Managing Director, TT Ltd.

With this growing need to style themselves differently, consumers are beginning to understand the importance of quality innerwear in the overall appearance, and this has organically fueled the growing preference for branded innerwear.

“The industry is moving from price sensitive to brand sensitive. The premium segment is showing enormous promise to cater these changing needs. The premium innerwear segment in India is going to grow at around 21 percent CAGR in the next three years,” says Srikanth Ram, Business Head, Park Avenue and Color Plus.

Aspirational lifestyles, rising purchasing power, availability of a wide variety and increasing number of working persons are the key factors that have propelled the market.

“The rise of disposable income has led to increase in the spending capacity of the consumer which leads them to experiment with fashion and style, also digitalisation has led people to become more updated with trends and this is how it is transitioned,” states Richa Kalra, Co-Founder, Candyskin.

Especially in the women’s segment, consumers are more open about their preferences, and emphasize on exploring options before a purchase. They are more aware of products and sizes and do not hesitate to spend on innerwear. “Spends have increased for sure, with the middle income group having good amount of disposable income the buying capacity has really improved. Infact middle income group happens to be the reason behind retail revolution in India,” says Hemant Kumar Jaiswal, Business Head, Bodycare.

In the menswear segment too, innerwear has made its presence duly felt. The growing demand for innerwear has compelled consumers, especially youngsters to increase spends. It is no longer treated as merely an undergarment but is worn as a fashionable article of clothing that can be flaunted. This growth in demand has carved out a potential market for innerwear in India.

International Brands Setting the Bar High

Over the years, a plethora of global brands have entered the Indian innerwear market, and this has increased the number of aspirational buyers. While this has led to stiff competition in the market place, the brighter side is that Indian brands are now compelled to ameliorate both their products and services. The competition is intense, but this has led to a much awaited evolution of the market, brands as well aspirational customers.

“Entry of global innerwear brands has increased awareness, and with the rising discretionary spending, all segments have registered growth. Foreign brands have brought in variety through international styles and fabrics. Indian consumers are also willing to spend higher-than-before amounts on innerwear. This has provided an exponential boost to premium and super-premium innerwear brands. Mid-segment brands have started extending their product portfolios as well,” says a spokesperson from Jack & Jones.

With the entry of these global bigwigs, the Indian consumer has been exposed to new styles, cuts, fabric, patterns, design, etc. This has made this entire category interesting and competitive. Consumers are willing to pay the extra in order to purchase the product they desire.

“Innerwear is no longer limited to typical whites and they now have plenty options to choose from. Social activities like gym, swimming, sports clubs, etc., have been on the rise amongst Indian audience and therefore people are conscious of the innerwear brands that they wear. These social occasions give them an excuse to flaunt their innerwear, hence everything they own needs to be a brand that reflects their personality and social standing,” says Vinod Kumar Gupta, Managing Director, Dollar.

While these global brands particularly serve the haut monde, it’s the private labels that, some retailers believe, will compete with the homegrown brands in the near future. “In innerwear market, the entering global brands are more focused at the top end of the range. About 80 percent of the Indian innerwear market are controlled by domestic brands. I find bigger threat in the private labels coming from retail chains and e-commerce than the international innerwear brands,” says Sanjay Kumar Jain.

Price Sensitivity

India has long been known as a price sensitive market, but the modern Indian customer has evolved overtime and now does not hesitate to spend for a worthy product. Yet, as a thumb rule, brands across segments and industries converge their endeavors to cap prices to the bare minimum in India.

“India is a price sensitive country and that will always be a major driver for brands. Alongside price as a factor, we human beings love options for everything; hence the one that gives the most choices wins,” adds Grishma Patil, Founder, Candour London.

“As a brand, we have always opted for smart pricing strategy in order to attract consumers and boost brand preference. Exploring new areas of innerwear, Jack & Jones has introduced new prints like stripes and checks with solid colors, in cotton blends, comprising 95 percent cotton and 5 percent elastane fabric. Each design is inspired and conceptualised in Denmark. Every brief comes with an elasticiszed logo on the waist band having a snug fit. Starting price for a single pack is Rs 249 and pack of two at Rs 350, prints at Rs 399, stripes at Rs 399,” says the Jack & Jones spokesperson.

While there has been a steady rise of discerning fashionistas, there also is a demand in the market for branded yet affordable lingerie for everyday use.

“To tap into this aspirational and value conscious segment, MAS Brands has launched a new sub-brand called every dé by amanté. It offers comfortable lingerie with an infusion of fashion and femininity at pocket friendly prices, starting at Rs 495,” says Smita Murarka.

It’s also noteworthy to mention rising cost is taking a toll on most brands’ margins. “The production and cost of the product is costing us high by the day as the prices for raw materials are increasing, it’s been very difficult to price products at cheap and affordable price range. However we are doing so by reducing our margins. This is not a permanent solution and we are still figuring how much growth is required for our brand to be doing what we are already doing,” adds Richa Kalra.

Staying Creative

In a rapidly evolving market like the innerwear market, brands and retailers are under constant pressure to stay ahead of the curve with routine innovation and creativity. This is where data plays a big role.

“Well we have enough database to work upon, working in the same industry for past 27 years gives us the edge over our competitors in understanding customer mindset better. We generally do not give discount on our products as our prices are very competitive,” states Hemant Kumar Jaiswal.

“Our products comes with unique Bio Wash which removes the hairiness and gives an excellent smooth feel. The seamless products are in great demand – it fits the body snugly and promises extraordinary comfort. We offer a range of products that not only appeal to one’s aesthetic senses but also provide an optimum level of comfort,” says Srikanth Ram.

Today, even the basic most products offered by brands feature quality fabrics and modern finishes. Brands are constantly working with innovative raw materials, fabric finishes, and exercising innovative marketing techniques in an attempt to stay ahead of their peers.

“We are doing an extensive range of products with innovative fabrics and different functions, which are useful in this category, we are also constantly trying to create comfortable products with functional features and fashion forward look and feel with premium qualities at as affordable prices as possible. With regard to brand promotion, we have done collaborations with MTV, digital promotions, new kinds of product detailed packaging, and we host fi t sessions on a regular basis, because our brand promotes the ultimate fit with style and comfort,” says Richa Kalra.

amanté was India’s first brand to introduce 2mm ultra-thin padded bra for making the bra feel like second skin while giving the desired support and contouring. The moulded lace bra offered the support of a T-shirt bra with the magic of lace. The brand’s latest innovation, the Sculpt Wire bra, has an encased silicon wire that guaranteed the support of a wired bra and the comfort of the non-wired bra at the same. The bra is designed for the contemporary women who, with her all-day busy schedule, deserves a bra that is made to move with her.

Candour London focuses more on fabric, prints and marketing innovations. “Fabrics have had a sweat free factor to it considering the Indian weather. Our branding and promotions have been with social media influencers along with a lot of social media contests keeping in mind the ongoing trends and which also include a lot of gifting, vouchers, hampers, etc. to drive as much as traffic possible to our brand,” says Grishma Patil.

Lux was among the first in the industry to appoint celebrities as brand ambassadors to make the brand more visible in the minds of the consumers. The brand has shared some of the most phenomenal tie-ups with its consistent association with the who’s who of the Bollywood fraternity, starting from megastar Amitabh Bachchan as the current brand ambassador for Lux Venus and Lux Inferno, Varun Dhawan for Lux Cozi, and Parineeti Chopra for Lyra.

Technology As An Enabler

Modern manufacturing is an increasingly automated and technology-driven industry. It relies on a slew of applications of advanced technologies and systems, that are changing the face of fashion manufacturing. Dollar Industries Ltd., was one of the first Indian innerwear companies with a fully backward integrated manufacturing unit. This state-of-art new processing unit is located at State Industries Promotion Corporation of Tamil Nadu (SIPCOT) in Erode.

“We are also the proud owner of a Spinning Unit situated at Vedasandur, Dindigul district. The unit is spread over 26 acres of land and is run meticulously. It is well equipped with the latest processing technology with Sclavos and MCS Dyeing Machines and the top finishing ranges like Bianco Padder, Strahm Padder, Strahm Dryer, Monfong’s Stenter and Lafer Compacting Machines to produce finished raw material dyed in any possible colour. Its production capacity is about 13.5 tons a day having 6 HPHT (High Pressure High Temperature) machines installed. This factory has a capacity of 1000 KL Zero Liquid Discharge with multiple evaporators and we follow the Norms of PCB, comply with labour laws and various quality systems,” states Vinod Kumar Gupta proudly.

Another company which is extensively using technology to create innovative products is Lux. To fight the rising temperatures, recently, Lux Cozi introduced India’s first scented vest in the market. The range from Lux Cozi is a very innovative and one-of-its kind product which promises to keep the wearer stay fresh throughout the day, in all types of weather conditions – something which hits home in a country like India.

Traction in Tier II & III Cities

Like most other fashion segments, innerwear is thriving in Tier II and III markets of India. Consumers from these small town and cities exhibit high aspirations and are eager to have a metro-like lifestyle. They are open to experimenting.

Industry sentinels attribute this bolstered growth to the proliferation of e-commerce. “Social media and the e-commerce revolution have equated the divide between a metro woman and Tier II markets. The knowledge and accessibility to products are available to both equally now. With this new wave the highest growth is coming from these markets,” states Smita Murarka.

Consumers of Tier I, II and III cities were compelled to consume from the limited choices that their local brick and mortar outlets stocked. With the advent of e-commerce, the smaller cities and towns were exposed to unlimited choices and options. The online market has not only increased the overall sales of the innerwear market but has also helped with brand awareness. “E-commerce is an amazing platform and is changing the rules of retail selling. Products are easily accessible here and also lots of attractive offers and schemes are available. The entire retail scene is destined to go through a significant transformation in time to come and the pace of this transformation is very rapid,” says Vinod Kumar Gupta.

Also, e-commerce helped oust the traditional temple of innerwear shopping in India—accepting whatever the salesman has to offer. Now, consumers can shop whatever and whenever they like

“Innerwear market has not just changed in terms of its style and fabrics but also in terms of buyer’s mentality. Girls no longer need their moms for lingerie shopping! The offline as well the ever-increasing online presence has made it easy and convenient to every type of buyer,” says Grishma Patil.

“Tier II and III cities are really setting the trends. We are getting more and more orders from these cities with increased awareness about brands and of course e-commerce is playing a very big role in this. Based on the e-commerce sale data we are able to understand markets better and decide where we need to open more stores and increase brand reach,” says Hemant Kumar Jaiswal.

The Future

The innerwear market in India is a lucrative segment poised for high growth. It is also an untapped as compared to other fashion segments.

“We have a beautiful future when it comes to this segment. The market was unorganised traditionally but is fast getting structured. Once the share of modern retail increases, we believe we have a bright future ahead,” says Richa Kalra.

Moreover, with the change in consumption pattern and the youth’s readiness to spend more in this category, lifestyle retailers are showing more interest. Today, reputed large format stores like Central, Shopper’s Stop, et all., all have dedicated spaces for this category.

Given the promise that this segment holds, the competition is rife not only with the global brands, but also among all Indian brands, all for the better. With so many brands around, there is a constant pressure to perform better as customers will pick only the best product in the market. “Introduction of new products with unique designs and cuts from various brands are increasing the competition in the market. With so many new entries in the market, it is definite that the future of innerwear seems quite prosperous and thriving,” says Saket Todi.

Having said this, brands and retailers who are going to spend larger share of revenue in making their backend strong to understand customer convenience, needs, and the current fashion and market trends, will champion the growth story in the years to come.

(With inputs from Gurbir Singh Gulati & Rosy N Sharma)

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