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Why is denim becoming a big business in India?

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The Indian denim market that was $6.15 billion in FY23 is expected to grow at 10%-12% CAGR on the back of various factors including growing consumer preference for the fabric

Bengaluru: The Denim category in India has experienced a surge over the years across various facets including production, retail presence, and revenue generation.

The narrative of growth extends from the rapid expansion of established titans like Spykar Lifestyle (over 300 stores), Pepe Jeans (over 450 stores) and Killer Jeans (over 500 stores) to the emergence of pioneering direct-to-consumer (D2C) brands such as Freakins, Bewakoof and Snitch.

American denim brand Levi Strauss posted income of Rs 1,153 crore in India in fiscal year (FY) 2022 while profit was up 41% to Rs 50 crore. While London-based Lee Cooper operated by Reliance Brands is growing at 35% and is expecting to end FY24 with net sales of over Rs 600 crore, as per Businessline.

In 2023, US-based denim manufacturer Wrangler unveiled its world’s largest store in Bengaluru. spanning across a retail space of 4,500 sq. ft. Meanwhile, Levi’s launched its largest store in Asia covering 7,521 sq. ft. of prime real estate, in Bengaluru, as part of its 150th anniversary celebration.

“India’s denim sector has been flourishing domestically and boasts a significant global presence, ranking second only to China. Despite its impressive growth, the industry still holds untapped potential,” said Dhruv Toshniwal, founder of The Pant Project, a D2C menswear brand.

“With an annual expansion rate of 8%-9%, the Indian denim market continues to thrive, outpacing global averages,” he added.

Growth drivers

The denim industry in India thrives due to factors such as a skilled workforce, cost-efficient manufacturing, rising interest in premium denim, a shift towards sustainability and the widening reach of retail outlets.

The market witnessed substantial growth, increasing from $4.3 billion in FY18 to $6.15 billion in FY23, according to the management consulting firm Wazir Advisors.

“The expansion of organised retail and the presence of international and domestic brands in the Indian market have made a wide range of denim products accessible to consumers. This has increased awareness and contributed to the growth of the denim industry,” said Pinky Rai, team lead design of The Indian Garage Co., a Bengaluru-based menswear brand.

The burgeoning youth demographic in India, known for embracing global fashion trends, is expected to be pivotal in fuelling the demand for denim products.

“The presence of a young and fashion-conscious population in India acts as a driving force for the phenomenon. Millennials and Gen Z consumers are willing to experiment with their style and are more inclined towards denim as a fashion statement,” said Mohit Jain, founder of Miraggio, a Gurgaon-based women’s handbag brand.

The Pant Project, an online retailer specialising in custom-made bottom wear for men, credits its expansion to its emphasis on customisation and personalisation. Based in Mumbai, the brand sets its sights on surpassing Rs 100 crore in annual sales by 2025.

Ace Turtle, a Bengaluru-based tech-driven retail company places emphasis on denim due to consumers’ inclination towards durable, high-quality products that stand the test of time.

“Consumer’s recognition of value in investing in high-quality products and the evolution of denim into the performance space delivering benefits such as cooling, water repellent and four-way stretch that cater to the needs of today’s active lifestyles, play a significant role in growth,” said Pramod Hebbar, vice president – design and product at Ace Turtle.

Time ahead

Toshniwal of The Pant Project feels that India’s denim market trajectory surpasses other regions, with a projected compound annual growth rate (CAGR) of 8.51% from 2023 to 2030, solidifying its position as a key player in the global denim landscape.

For The Pant Project, denim is a new category in its product portfolio, accounting for 10-15% of sales. “We are indeed considering plans to ramp up the production of our denim category in response to growing demand and market trends,” he added.

Credo Brands-owned Mufti Jeans also intends to grow its denim business in line with demand. “With a nearly 40% contribution to our sales, denim is an important driver of both continuity and growth for us. The growth in the denim category has remained steady over the past few years, aligning with expectations,” said chairman Kamal Khushlani.

Spykar Lifestyles, the Mumbai-based youth fashion denim brand, foresees a growth of around 15% in its denim segment compared to the current year and is committed to sustaining this growth rate, as stated by chief executive officer Sanjay Vakharia.

Ace Turtle, which operates globally licensed denim brands such as Lee, Wrangler and Dockers, is about to leverage its tech-driven operating model and proprietary technology platforms to predict demand in sourcing, based on real-time analysis of consumer expectations.

“We believe that denim will continue to develop at a faster rate than it is now, with predictions indicating a CAGR of 10-12% Currently, we source the denim products for Lee and Wrangler from third-party apparel manufacturers based in and around Bengaluru with a small percentage sourced from Bangladesh. Given the rising demand for our brands, we will need to ramp up production in the current year,” added Hebbar.

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