Formal Shirts Market Analysis: Current trends and future mapping

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Despite the fact that the segment has seen a setback with the advent of the casual wear industry, lately formal wear is back in fashion with brands having modernized their offerings that include new colours, fits and innovative fabrics. The Made-to-Measure segment too has led to the growth of formal shirts.

Branded formal wear shirts segments have expanded beyond metropolitan cities with rapid globalisation, increased brand awareness, and larger consumer groups. Social media trends are also new drivers for the growth of formal shirts, communicating a positive impact to young, fashion-conscious individuals.

Let’s Look at the Score Chart

Formal shirts are gaining traction among consumers, presenting major opportunities for market expansion. Online platforms are being preferred to purchase formal shirts, as they cover maximum market geographies with its vast availability of options.

But on the contrary, there is a strong debate on the long-term relevance of formal shirts since the casual trend has heavily taxed the formal wear segment. The debate now is whether formal shirts will lose their existence, or will they maintain an immortal form which cannot be replaced with the new casual wear trend. This article analyses the debate and arguments for and against formal shirts while speaking to key brands in the shirts business who definitely say, ‘formals have changed the way they look now, and semi-formal is the new formal!’

Salman Noorani, Managing Director, Zodiac, a brand which has pioneered the formal, ready-to-wear shirt segment in India, shares his thoughts, saying, “Understanding the changing perception of consumers is a must.

With a proliferation of brands and consumers going up the value chain as well as new businesses being set up, there has been a spurt in both formal and casual wear. These new-age businesses have far more relaxed norms for dressing at work and we address that segment with our casual wear brand z3 Relaxed Luxury.”

“In Zodiac during the past couple of years we have innovated to provide the classic business wear consumer with both, fashion and product differentiation in Bassano and Barboni along with our hall mark of 2 ply Egyptian cotton structures. In our trendy fashionable brand ZOD! Club Wear we have seen a lot of pull for our Tuxedo shirts and bow ties,” he adds.

Formal shirts are strongly differentiated with their fabrics as Dharmen Mehta, Director, Ben Morris explains. “The formal shirt market, which evolved around polyester cotton fabrics moved upwards to cotton and then to premium cotton fabrics. Today there is a clear demarcation on formal shirts. Formal shirts from the organised sector are mainly 100 percent cotton or 100 percent linen and formal shirts from regional players are mainly blended fabrics of polyester and cotton.

As per Narinder Kaur, Design Head, Turtle, formal shirts segment has changed roles. “The perception of formal shirts has drifted from stiff collars to soft ones. It is more towards cross overlook, to be paired with chinos and knit bottoms. The sizes of checks and colours have become relaxed. Though the ‘Reformals’ (as we call them in Turtle) have gained ground, board room formals still have a contribution in the market share,” she states.

Competition Index: International Vs. Domestic Brands

Competition has intensified in the country as more domestic brands gain market share with their shirt centric portfolio. International brands in formal shirts still maintain their unique positioning and there are very few domestic brands competing against them.

Dharmen Mehta explains the difference in competition saying, “If we look at the Indian formal brands and international brands there is no competition at all. We are far behind on the fabrics being used by international brands. Apart from the fabrics; it is the fi t, styling, collars and pricing that gives them an edge over Indian brands. There are very few brands in India who have the strength and ability to compete with international labels. Some brands which are up to the mark include Ben Morris, Cameccie, Brunito, Zodiac, etc. to name a few.”

His theory stands true as foreign brands are always searching for new strategies for continuous growth and are more innovation led. While foreign brands continue to lead with innovation led products, domestic brands are gaining ground in some markets including the first-tier cities differentiating them at the design level. This truly is now highlighting the intense competition for mind share of consumers by both international and domestic brands.

Narinder Kaur gives a clear explanation of this saying, “In the formal shirts segment, international brands are on the elite side and are focused more on giving high-end products with premium pricing. The pure formal shirts segment is really miniscule in our country. This affluent section with an elite taste rarely prefers the domestic brands for their daily wear. As such there is negligible competition in international vs. domestic brands in formal shirts.”

Price Play

Companies employ a number of pricing strategies to differentiate their brand and gain competitive advantages in the marketplace. Technically there are two pricing strategies which operate largely in the branded Indian formal shirts business. One is the premium pricing segment which encompasses brands like Louis Philippe, Van Heusen, Zodiac, Arrow, etc., which are on an average priced Rs 2,000 and above. Then is the aff ordable pricing strategy which covers the aspect of value given in the garment in justification for its price.

An expert brand like Zodiac unfolds its pricing strategy in the formal shirts business. Salman Noorani says, “From the days of fabric being bought and then a tailor converting it into a shirt with a very gradual shift to readymade shirts, our brand has seen it all. Our range starts at Rs 2,499 and goes up to Rs 19,999 for a 2/300’s Italian fabric shirt in our Regale made-to-measure, limited edition bespoke collection.”

With deep understanding of the market serving regional to national retail players, Narinder Kaur explains: “The formal shirts segment is price sensitive. The tendency is more towards a lower MRP. For daily wear shirts in this segment, the consumer is not ready to pay extra. His budget is tight in this section. Only if it has some tangible value addition, the consumer will pay the price premium. So, the MRPs have become sharper in this segment.”

Market Gap: The Mid Segment

The mid segment in shirts is also nicknamed as the ‘popular shirts’ segment which truly has either disappeared from the corporate brand planning or has been left to the regional or unbranded players to enjoy. An obvious question here arises as to why corporates are not willing to enter the popular formal segment.

Dharmen Mehta sheds some light on this subject stating, “The shirt category of Rs 1,000 is mainly controlled by regional players and they play more with blended fabrics. On the other hand, Rs 1,000 and above prices are mainly governed by organised players and who mainly use cotton fabrics.

The gap between organised and regional players is reducing and only a few organised formal shirt brands are now present in India. The major chunk is taken by the regional players who are going big and planning to be national. They off er quick response to the change in designs, fi ts and quick turnaround vis-à-vis national brands. Since the decision making is at a single place with regional players, it becomes easy to control, modify or change the entire formal shirt gimmick quickly. They are fast to adapt changes and sometimes are far more ahead in forecasting of the trends than an organised brand.”

Defining why corporate brands are not comfortable to enter the mid segment, Mehta further adds, “Due to the corporate culture, politics and multiple decision levels in the organised sector, it becomes very difficult to the process of implementation at a faster pace. This in turn keeps them way behind the regional players who do not face these issues. Moreover, corporate brands also have multiple businesses and hence their focus may not be only on garments. Current example is of ITC wherein they sold out John Player.”

Narinder Kaur is also in agreement with Mehta saying, “In the mid formal shirts category, there are more brands which use blended fabrics. And it is completely driven by price. Design and colour are a second priority. The mid segment category focuses more on Tier II and III cities. The unorganised brands don’t carry many overheads to take care of their brand loyalty.

They thrive purely on lower MRPs. In addition, the economies are set for the unorganised sector to penetrate deep in the Tier II and III locations within the city and rural markets. They work on easy logistics. They keep themselves light on the stocks and raw materials which help them to react faster to the market changes.”

Consumer Awareness: High-End Prepositions

Quality comes at a price. The Indian consumers have a deep understanding on this subject and are able to judge the difference between normal cotton shirts and shirts made out of Supima, Pima or Egyptian cotton, etc. They understand the unique properties, its comfort and richness level and are willing to pay extra for this.

Being into high-end exclusive shirts business with his brand Ben Morris, Dharmen Mehta has clearly studied this. He says, “Indian customers are now knowledgeable and are ready to pay a better price for a shirt if they find a value addition to it. This preposition could be in form of base products, styling, fits, performance etc.”

Meanwhile, for some it’s subjective. Narinder Kaur says, “Formal shirts sell on the basis of good hand feel, colours and fits as well as some tangible technical value addition. Supima, Pima entices a small segment as their price impact is high.”

Linen & Its Popularity

Common linen fabric (made from the stalk of the flax plant Linum usitatissimum) wrinkles but is classy and works well for semi-formal occasions. If it has to be given a formal touch, a high-quality linen-blend works well with formal shirts.

Narinder Kaur says, “Linen is considered as a casual fabric in India. It hasn’t gained much dominance in formal except a few formal shirts in linen solids and some old checks. But lately, the scene has changed. Printed linen shirts and fancy checks are gaining ground in this section. Linen has now become an all-season fabric. Even in festive seasons, linen prints and bright solid shirts have a good demand. Blended linen has made it easier on the pocket of the consumer.

The fabric is grabbing more share percentage vis-à-vis cotton. Dharmen adds to this saying, “Linen is slowly getting its place in the formal segment due to availability of good finished fabrics in India. At Ben Morris, we use only 120’s lea and 150’s lea and make very fine formal shirt which is light weight and comfortable. More of design development in linen and its blend will make this product more affordable in formal segments. More and more brands are now adding 100 percent linen formal shirts into their portfolio due to good availability of the base fabrics. This trend will continue, and linen will grow in India at a faster pace.”

E-Commerce Fueled Growth

The digital retail channel is no more seen as yet another medium to buy shirts. Rather it’s modernised and value-added version – something which physical stores lack. The good fashion e-commerce channels are moving to solutions based on artificial intelligence where personalisation and content curation on personal taste have become a lot more important.

Dharmen Mehta gives his perspective saying, “E-commerce has helped organised players to market their products from door-to-door with an increase in volumes and turnovers. But the other side the biggest question which has to be addressed is whether this retail channel is being used for selling their normal range or using this platform to clear their old stocks. If this platform is used properly, it is sure to give a boom to the organised shirt segment. The only requirement is to put the complete information handy to the end customer so that it becomes easy for him to make a purchase call.”

Salman Noorani further illustrates this point saying, “Our brands are available online only through our own web store We started this channel when e-commerce was at a nascent stage in India and today, we are happy with the results we are getting.”

The Future of Formal Shirts

Being formal is a way of life in India and it will be difficult to see the category being affected largely. But yes, the key to success to the formal shirts business will be innovation which gives a good fit, comfort, new age fabrics and a uniqueness in itself

Talking on the demand for formal shirts Narinder Kaur says, “The demand for formal shirts is oscillating from low to medium but is not hitting the high. This is not the segment where consumers indulge. For maximum population of our country, formal is a basic necessity. Of course, there is a demand for good formals where the consumer is willing to pay the price for its USP. But that section is tiny. A lot depends on the changing lifestyle and the dynamic day structure of a consumer. Innovations and inventions are required along with more focus from brands to revive the formal shirt category.”

Dharmen Mehta looks at a bigger picture as he shares his viewpoint. “The future of formal shirts in India is good but the price of the product matters.”

“Formal wear is definitely in trend just now – we can see it across Zodiac for the classic male and Zod! Club Wear our brand that targets the sharp, trendy dresser. This segment has been our main stay of business since more than 65 years. However, in the recent years fashion has seen a swing from formal to casual – hence our reason to have z3 Relaxed Luxury as part of the House of Zodiac,” Salman Noorani concludes.

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