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I. OVERVIEW OF BRANDED GARMENT MARKET IN INDIA
According to a study conducted by consultancy firm KSA Technopak and trade journal Images, the Indian branded garment market, which is estimated at Rs 90 billion, will account for 30 per cent of Rs 300 billion ready-mades.
Based on sales, the study has estimated the Indian clothing market at Rs 431 billion. Following the entry of several new brands, the branded segment is expected to grow by 26 per cent during the current fiscal.
The smaller brands are however, under pressure with the key 125 brands collectively growing by 35-40 per cent and a large number of smaller ones showing a negative growth.
The study, released by union textiles minister Kashiram Rana, said that while old brands have grown by 10-40 per cent, the new brands have a potential to grow by 30-100 per cent.
Traditional Indian wears such as sarees, kurta-pajama and dhoti are estimated to be around 40 per cent of the total market, while two-third of the tailor-made segment is accounted for by western wears.
Contrary to perception, the study points out men are more brand conscious than women with brands such as VIP, Park Avenue, Louis Philippe, Van Heusen and Peter England selling more in 2000-01.
Men's wear accounted for nearly 59 per cent of the branded market and has grown at 20 per cent compared with around 23 per cent in the women's branded-wear category.
The study also points out that as the income level increases the spending on clothing by women increases, while men's spending on clothing decreases, though the gap is also decreasing from 14 per cent in the below Rs 22,000 income category to four per cent in households with over Rs 1 million annual income.
During 2000-01, with a 40 per cent increase in sales Madura Garments with its seven brands moved into the top slot with cumulative sales of Rs 4.55 billion, which is projected to grow to Rs 7 billion by 2003.
Eight Arvind Mills brands which include the likes of Arrow, Wrangler and Newport, had cumulative sales of Rs 3.07 billion during 2000-01, compared with Rs 2.37 billion in the previous year and continued to be in the second spot. Sales of these brands are expected to be around Rs 60 billion in 2003.
The study has said that VIP was the largest selling brand in India and Maxwell which owns the brand had sales worth Rs 4.21 billion in the last fiscal but moved down from its position as the numero uno brand in 1999-2000 to the third slot in 2000-01.
Development in menswear segment-
The Indian branded apparel sector, especially in the menswear segment, is going through a process of consolidation, with turnovers of most of the brands remaining stagnant at a level of around Rs 60 crore, (except Park Avenue which is a Rs 100 crore brand).
"The branded segment for menswear is concentrated in only the top 20 cities in the country, and there are far too many brands fighting for a share of this limited pie," according to officials of one of the new entrants in the men's wear segment.
And even as each brand tries to differentiate its product in the market, "this is very difficult, being more of a mass-market segment, with a high level of standardization," opine sources. So, to increase market share, most brands have moved into formal, semi-formal and casual wear, and are also looking at the women's wear and sportswear segments, which are not as saturated.
According to Mr Ashish Pandya, vice president, sales and marketing, Arvind Brands, which has recently launched one more, brand `Bay Island’, “Bay Island is a more casual style of dressing, in a very affordable price range from Rs 539 to Rs 599 for shirts, and trousers at Rs 749? However, it is the classic shirts and trousers that contribute the most to our turnovers."
Mr S Padmanabhan, senior president, Tamarind, S Kumars, concurs with this. "We have introduced a lot of new age and innovative fabrics in our collections, but the classic formals and checks still account for the largest turnovers. And this makes competition quite tough, especially when differentiation alone is not the keyword."
As against this, Color Plus, Provogue, etc have focused only on differentiated and innovative products, and are doing fairly well in that segment. "And this will lead to more mergers of the Bombay Dyeing-Proline kind. Raymond had tried to join hands with Color Plus, but this did not go through. Such tie-ups give a lot of benefits to both the brands. For instance, in the case of Bombay Dyeing-Proline, the former will be able to benefit from the specialized products and designs from Proline, and Proline will have a larger distribution network of Bombay Dyeing. And this is what companies should focus on - their core strengths, and how best these can be made use of," state sources.
Even as consolidation can lead to brands joining hands, or moving into slightly lower price segments, or into newer areas such as ladies' wear, sportswear, moving out completely from the existing price segments into lower ones is being ruled out by the industry. "Brands have to create a ready-to-wear culture in the market, for which communication is important. And brands will find it very difficult to bring down prices significantly due to the advertising costs. Of course, some discount schemes are being offered to the consumers, but these don't really help in boosting sales in the long, or even in the medium term," state sources.
Price limitation is also the reason that would prevent brands from moving into smaller cities, as the ready-to-wear culture is almost non-existent there, and prices would have to be extremely low, which not many brands can offer, according to industry experts. As against this, Siyaram's Oxemberg began by targeting the smaller cities, and is now planning to move into the big cities, and will be venturing for the first time into the western region. "We have received overwhelming response from the Mumbai dealer community at the recently concluded National Garment Fair. In fact, Oxemberg received the largest number of visitors at its stall," informed Mr Arvind Poddar, managing director, Siyaram Silk Mills.
However, it is the smaller, regional brands that are benefiting from the market creation efforts of the big brands. "Low overheads help the small brands to keep prices low. And they are able to cater to a sizeable share of market, not just in the big cities, but also in the smaller ones," say industry sources.
According to a study conducted by consultancy firm KSA Technopak and trade journal Images, the Indian branded garment market, which is estimated at Rs 90 billion, will account for 30 per cent of Rs 300 billion ready-mades.
Based on sales, the study has estimated the Indian clothing market at Rs 431 billion. Following the entry of several new brands, the branded segment is expected to grow by 26 per cent during the current fiscal.
The smaller brands are however, under pressure with the key 125 brands collectively growing by 35-40 per cent and a large number of smaller ones showing a negative growth.
The study, released by union textiles minister Kashiram Rana, said that while old brands have grown by 10-40 per cent, the new brands have a potential to grow by 30-100 per cent.
Traditional Indian wears such as sarees, kurta-pajama and dhoti are estimated to be around 40 per cent of the total market, while two-third of the tailor-made segment is accounted for by western wears.
Contrary to perception, the study points out men are more brand conscious than women with brands such as VIP, Park Avenue, Louis Philippe, Van Heusen and Peter England selling more in 2000-01.
Men's wear accounted for nearly 59 per cent of the branded market and has grown at 20 per cent compared with around 23 per cent in the women's branded-wear category.
The study also points out that as the income level increases the spending on clothing by women increases, while men's spending on clothing decreases, though the gap is also decreasing from 14 per cent in the below Rs 22,000 income category to four per cent in households with over Rs 1 million annual income.
During 2000-01, with a 40 per cent increase in sales Madura Garments with its seven brands moved into the top slot with cumulative sales of Rs 4.55 billion, which is projected to grow to Rs 7 billion by 2003.
Eight Arvind Mills brands which include the likes of Arrow, Wrangler and Newport, had cumulative sales of Rs 3.07 billion during 2000-01, compared with Rs 2.37 billion in the previous year and continued to be in the second spot. Sales of these brands are expected to be around Rs 60 billion in 2003.
The study has said that VIP was the largest selling brand in India and Maxwell which owns the brand had sales worth Rs 4.21 billion in the last fiscal but moved down from its position as the numero uno brand in 1999-2000 to the third slot in 2000-01.
Development in menswear segment-
The Indian branded apparel sector, especially in the menswear segment, is going through a process of consolidation, with turnovers of most of the brands remaining stagnant at a level of around Rs 60 crore, (except Park Avenue which is a Rs 100 crore brand).
"The branded segment for menswear is concentrated in only the top 20 cities in the country, and there are far too many brands fighting for a share of this limited pie," according to officials of one of the new entrants in the men's wear segment.
And even as each brand tries to differentiate its product in the market, "this is very difficult, being more of a mass-market segment, with a high level of standardization," opine sources. So, to increase market share, most brands have moved into formal, semi-formal and casual wear, and are also looking at the women's wear and sportswear segments, which are not as saturated.
According to Mr Ashish Pandya, vice president, sales and marketing, Arvind Brands, which has recently launched one more, brand `Bay Island’, “Bay Island is a more casual style of dressing, in a very affordable price range from Rs 539 to Rs 599 for shirts, and trousers at Rs 749? However, it is the classic shirts and trousers that contribute the most to our turnovers."
Mr S Padmanabhan, senior president, Tamarind, S Kumars, concurs with this. "We have introduced a lot of new age and innovative fabrics in our collections, but the classic formals and checks still account for the largest turnovers. And this makes competition quite tough, especially when differentiation alone is not the keyword."
As against this, Color Plus, Provogue, etc have focused only on differentiated and innovative products, and are doing fairly well in that segment. "And this will lead to more mergers of the Bombay Dyeing-Proline kind. Raymond had tried to join hands with Color Plus, but this did not go through. Such tie-ups give a lot of benefits to both the brands. For instance, in the case of Bombay Dyeing-Proline, the former will be able to benefit from the specialized products and designs from Proline, and Proline will have a larger distribution network of Bombay Dyeing. And this is what companies should focus on - their core strengths, and how best these can be made use of," state sources.
Even as consolidation can lead to brands joining hands, or moving into slightly lower price segments, or into newer areas such as ladies' wear, sportswear, moving out completely from the existing price segments into lower ones is being ruled out by the industry. "Brands have to create a ready-to-wear culture in the market, for which communication is important. And brands will find it very difficult to bring down prices significantly due to the advertising costs. Of course, some discount schemes are being offered to the consumers, but these don't really help in boosting sales in the long, or even in the medium term," state sources.
Price limitation is also the reason that would prevent brands from moving into smaller cities, as the ready-to-wear culture is almost non-existent there, and prices would have to be extremely low, which not many brands can offer, according to industry experts. As against this, Siyaram's Oxemberg began by targeting the smaller cities, and is now planning to move into the big cities, and will be venturing for the first time into the western region. "We have received overwhelming response from the Mumbai dealer community at the recently concluded National Garment Fair. In fact, Oxemberg received the largest number of visitors at its stall," informed Mr Arvind Poddar, managing director, Siyaram Silk Mills.
However, it is the smaller, regional brands that are benefiting from the market creation efforts of the big brands. "Low overheads help the small brands to keep prices low. And they are able to cater to a sizeable share of market, not just in the big cities, but also in the smaller ones," say industry sources.