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Nov, 01 2008

Denims in vogue

Overalls, shirts, skirts, jeans, jackets, bags, capris, dresses, caps… the word `denim` has become synonymous with new age fashion and style, becoming the premier choice for clothes and accessories. With no maintenance, this versatile, rough and tough “re

The jeanswear market in India is currently pegged at approximately Rs 6,000 crore - the bulk of it in the unbranded market according to recent reports. However, the branded segment is believed to be growing at a faster pace, with brands giving tough competition to one another. According to industry sources, the total size of the jeans market in India is about 40-45 million pairs of denims out of which 44 million pairs are in the value segment(less than Rs 1,000). The Indian retail market size of jeans (men`s and women`s) in 2007 was Rs 3,080 crore with a healthy growth of 18 per cent over last year as per research conducted by Technopak. According to an Indian expert, denim production in India in 2006 was estimated to be at 400 million metres, of which 250 million metres was for domestic consumption and the rest for exports.

Towards organised market

Looking at the growing economic activity in all spheres, the textiles and garments sector is a rapidly increasing industry with huge potential for growth. Today, the jeanswear industry is also contributing its share to the apparel industry. Denims have always been everyone`s favourite. The latest trends in the denim market are luring today`s youth to nearby stores, high streets and shopping malls. The denim wear market is no longer restricted to men`s wear. With growing demand, there is great acceptance in the kids and women`s wear segment as well. Earlier, most of the revenue was generated by the men`s wear market. It was higher as compared to women`s wear and kids wear brands but with growing consumption of denims, modern retailers are now receiving good revenues from both the segments. Gone are the days when unorganised denim players used to dominate the market. Today, the whole scenario is changing. The unorganised denim wear market is now shrinking despite the fact that foreign players are penetrating the Indian market. Levi`s, Pepe Jeans London, Lee Cooper and Wrangler are some of the most popular international brands that have become successful in positioning their brand identity on the Indian landscape. Talking about the size of the denim market, Chetan Shah, Country Head, Pepe Jeans London says, “In terms of percentage, 30 per cent is the branded denim segment and 70 per cent is the unorganised sector of the total jeanswear market in India. If you compare it in terms of value, both branded and unorganised sectors amount to Rs 1,000 crore.” At present, Pepe Jeans has a market share of 25 per cent, while home-grown brands like Spykar, Killer, Flying Machine, and Moustache are also generating maximum profits from the market. “Spykar operates in the premium segment worth Rs 1,000 crore and we currently have 19 per cent market share in the premium denim segment,” informs Sanjay Vakharia, Director -Marketing, Spykar Jeans.

Brand-conscious market

With changing lifestyles, the organised players are coming up with contemporary designs to target the youthful, stylish, trendy and fashionable consumers. Today`s consumer is educated and very well informed about different brands and knows what to buy and what not to buy. Indian consumers are no longer price conscious rather they are willing to spend money on high-end denim brands. Denims are not only restricted to jeans, shirts, jackets and skirts, but are also a popular choice for accessories like bags, belts and caps. In denims, low rise, slim fit and twisted fit are in vogue. Ripped, brushed, torn, bleached, laser finishes, acid and ice-washed are enough to tempt the brand conscious customers. The organised denim players are not only catering to the premium class, but are also catering to the upper-middle and mid-segments as well. “Today`s customer is definitely brand conscious and asking for brands. Consumers are looking at innovations rather than just a pair of jeans and T-shirt. The key to catching up with these changes is to innovate, as the Indian denim customer is more variety driven,” says Shah. The brand has been quick to gauge that the young Indian consumers were getting bored with just a five pocket pair of jeans and hence Pepe Jeans today is a one-stop destination for the young premium segment customer with its exhaustive range of fashion wear, club wear, and evening wear along with the core jeans.

India is an emerging nation and has a huge potential to harness the untapped market. “The denim industry has registered impressive growth in the last five years. This growth has also changed the consumer preferences- he has become more discerning and fashion conscious,” opines Vakharia.

Franchising in denim

Spykar, Live-in, Recap, Numero Uno, Killer Jeans, Trigger Jeans, Flying Machine Jeans and Moustache, are among the many which are running successfully in India through franchising format. Apart from domestic players, most of the renowned global denim wear brands such as Levi`s, Pepe Jeans London, Lee Cooper, Gas and Tommy Hilfiger have entered the country through franchising model. Other high-end international denim brands that are available in India are FCUK (French Connection), Wrangler, Lee, Esprit, Replay, Rifle Jeans, Trussardi Jeans, Calvin Klein, Sixty Group, Eike Jeans and Comet UK and the most recent entrant Jack & Jones. Apart from casual jeans, designer jeans are also in vogue.

Franchising is a profitable business and it is doing extremely well in the denim market. Talking about franchising in the denim wear market, Vakharia says, “Franchising as a concept has been taken really well by the denim industry and I believe it has a bright future.” To this, Shah says, “With India set on a giant retail boom, franchising has huge potential as a successful business model.”

The franchising model is adopted by many companies to expand their businesses. Franchising turns out to be a worthwhile business option for budding franchisees who want to take franchise of various brands. The franchisors in denim wear industry offer required training and support to the franchisees which helps them to become their own boss. All you need is good educational qualifications and the required investment to start your own business.

Major players

A number of players, both Indian and international, have entered the Indian market. Both categories are listed below:

Indian Players

The Indian players include the following:

Spykar:

Spykar has established itself as the Indian youth icon and the brand of the Generation Next in the Indian apparel industry, with a vast and staggering array of designer wear- from the first manufactures of Cargo in India unto the authentic five pocket Jeans to fashionable denims, fatigues, jackets, tees, shirts, etc. to trendy bags, belts, caps, wallets, socks and other accessories like shoes, deodorants, junk jewellery, eyewear. Having provided clothing for the last 15 years to the brand conscious youth, Spykar Lifestyle intends to now offer complete styling solutions to patrons through the Spykar Style Lab, with a reach to 3 million customers, influencing the youth culture across India.

Levi Strauss (India):

Levi Strauss (India) Pvt. Ltd (LSIL) is a Bengaluru based, wholly owned subsidiary of Levi Strauss & Co. (LS&CO.). The company markets the Levi`s®, Dockers® San Francisco & Levi Strauss Signature® brands in India. The company was established in 1994 and brought authentic American jeanswear to India by launching the iconic Levi`s® brand. It has since built a strong retail and distribution network spanning more than 250 cities and 750 outlets backed by an equally strong sourcing base. The company, with strength of about 200, is headquartered in Bengaluru.

Kewal Kiran Clothing:

Incorporated in 1981, Kewal Kiran Clothing Limited today is amongst the few large branded apparel manufacturers in India. The company owns Killer, Easies, Lawman and Integriti – leading brands in men`s wear in India. The company with sales in Asia, Middle East and CIS designs, manufactures and markets branded jeans, semi-formal and casual wear for men. The company began as a manufacturer of men`s wear for reputed brands. The company is exposed to global standards in quality, technology, marketing and branding. In 1989, it introduced `Killer`, the first international denim brand created in India. Today `Killer` is one of the most successful and widely recognised brands in the Indian apparel industry.

Numero Uno:

Numero Uno, one of India`s first indigenously manufactured denim labels, was incorporated in 1987 by Hi Fashion Clothing Co. From the 1st of April 2007 the company changed its name to Numero Uno Clothing Ltd, keeping in line with its growing presence in both national and international markets. The company started by primarily manufacturing jeans for men and moved slowly to jeans for women, eventually designing and manufacturing complete wardrobes for men and women. The company has been introducing trendy and innovative themes every season to cater to changing tastes and lifestyles.

International players

The International players include the following:

Pepe Jeans London:

Pepe Jeans London originated from the fashionable Portobello area of London in 1973 as a result of the efforts of three NRI brothers. In a very short span, the brand became the best selling denim brand in England. The company entered the Indian market in 1989 and today is amongst the premium brands in India in this segment. Pepe Jeans is an absolute casual wear brand and sells everything one would associate with such as casual cotton shirts, denim shirts, lightweight jeans, T-shirts, shirts, jackets, cotton casual pants and accessories such as bags, caps, belts, wallets, wrist bands, etc.

Lee Cooper:

Founded in London in 1908, Lee Cooper offers a wide range of lifestyle jeans and products to men and women of all ages. In 2006, Lee Cooper International entered into an equal joint venture with India`s largest retailer, now known as Lee Cooper India Pvt. Ltd, under which the first franchisee store was opened. At present, the company has 31 exclusive brand outlets, 50 shop-in-shops and 250 selling points in India. By the end of this fiscal, it will double the selling points and add 24 new stores to its kitty. The company aims to grow to 100 stores within the next two years. An investment of about Rs 35-40 crore has been earmarked for retail expansion this year.

Calvin Klein:

Calvin Klein Inc. is an American fashion brand. The company entered through Murjani Group. As part of the exclusive agreement, Murjani will distribute ck Calvin Klein and Calvin Klein Jeans apparel and accessories in India. At present, the Calvin Klein brand has nine stores - two standalone stores (in Delhi) and seven shop-in-shops - in the country. It plans to have in place 30 stores (combination of shop-in-shops and freestanding stores) by March 2009. Apart from its presence in Delhi, Mumbai, Bangalore and Pune, this brand hopes to enter Chennai, Hyderabad and Punjab this year.

Replay:

Replay, the luxury denim wear is a part of Fashion Box Group which recently tied up with India`s biggest retail network, Pantaloon. With its presence in over 50 countries and over 200 single brand stores world over, Italian fashion brand Replay, makes its debut in the Indian market with its two stand-alone stores and three corner stores in Pantaloon`s high end retail chain. The Italian denim brand is also looking at expanding its business in other Asian nations like China, Japan and South Korea.

Challenges, competition & future

As compared to the booming international denim market, India is still emerging. Indian brands haven`t enjoyed much success. International brands, which are present in India, are doing extremely well. Competition is increasing with the presence of a number of denim brands in India. To stay ahead of competition, the players will have to raise their standards to international levels; only then will they be able to make a strong foothold in the country. “The Indian denim market is still in the nascent stages but it`s definitely a growing market which is growing in the right direction,” says Shah. Indian brands are working on new sale tactics to target niche segments. Discount offers, seasonal sales, loyalty programmes, and providing right pricing to all consumer segments are some of the strategies used to retain existing customers and to attract new customers. Commenting on their recent promotional strategy Shyam Sukhramani, Marketing Director, Levi Strauss India Pvt. Ltd says, “Our latest campaign, `Levi`s® 501® – Live Unbuttoned` introduces the new 501® fit that is lower in rise, slimmer, and has a tighter butt in order to make consumers look sexier! This fit is available globally, across 110 countries at the same time. Specifically in the Indian context, this campaign targets to bring the Indian consumer closer to how jeans have always been worn i.e. button fly.” Every company is coming up with aggressive marketing, promotional campaigns and constant publicity to make their brand popular. Various companies have been successful in the Indian market using different approaches and different strategies. For example - Pepe Jeans London works on a 360 degrees approach on the marketing communications strategy, involving both above the line and below the line activities. Billboards print advertising in both national and regional newspapers and all lifestyle magazines constitute Pepe`s above the line strategy. Talking about the threat to Indian denim players

Vakharia says, “I think more than being a threat, the entry of global players helps the market and consumers to mature faster. On the front of our strategy we have already started to move our brand from being a denim brand to a jeanswear lifestyle brand, focused on opening larger stores, also penetrating the tier 2 and 3 cities.” Denims are targeted at the youth, so the players will have to come up with innovative designs to match the persona of the cool, trendy, stylish, and brand conscious youth. “The Indian denim market is evolving at a much faster pace than the international denim market. There is still a large part of the population that doesn`t consume denim and therefore there is a tremendous opportunity to reach a far larger consumer base as compared to the penetration in developed markets,” says Sukhramani. India offers a great business opportunity not only for its own brands but for global brands also. To beat the competition, the companies should try to re-invent their technologies to provide good quality fabric to the consumers at affordable prices to make a strong customer base. The future of franchising in the denim industry in the years to come is indeed very bright.

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