One of the sunshine sectors in India's booming retail story is the apparel sector. The domestic apparel market, which was worth Rs 2, 07,400 crore in 2012, is expected to grow at a CAGR of 9% over the next decade.
In a fast paced world where change is the only constant and consumer awareness is extremely high, 'keeping it trendy' is the way to go for apparel brands. Given the huge chunk of unorganised segment, there is great growth potential for several brands to tap this segment and get it organised. The Indian apparel market can be broadly categorised in three segments, namely Men's wear, Women's wear and Kids' wear.
The Men’s Wear Market
With a market size of Rs 87,500 crore in 2012, Men's wear is the largest segment in the Indian apparel space, accounting for 42 per cent of the overall market (says a Technopak report). In comparison, Women's wear makes up 38 per cent, while Kids' wear comprises 20 per cent of the market.
The men’s wear market can further be divided into various categories including woven shirts, trousers, denims, winter wear, innerwear, T-shirts, suits, active wear, ethnic wear and daily wear. The woven shirts category is the single largest within the men's wear market, followed by trousers and denim.
The sector is replete with interesting franchise opportunities (from ethnic wear to casual wear) that can be availed.
One such opportunity comes from Manyavar. Synonymous with ethnic men wear, Manyavar started out in 2008 and is known for its wedding wear with its wide range of sherwanis, kurtas, Indo-Western wear, party wear and accessories.
The brand's creativity, price range and timely supplies form its USP.
Manyavar plans to open 10 flagship stores every year in metro cities and wants to reach 600 EBO's by 2016 from its present 325+ EBO's. The brand is present in Dubai and Sharjah and wants to further expand in the UAE. Also, after marking its presence in Bangladesh, it wants to tap the Sri Lankan, Nepalese, US and UK market. Manyavar envisages the men's wear segment to show maximum growth in the organised apparel industry in the years to come.
Another opportunity to enter the lucrative men's wear segment comes from Indian Terrain. Launched with the vision to provide Indian man a “deconstructed look to work”, Indian Terrain is one of the leading brands in premium casual wear for men. Stylish yet comfortable, its sportswear collection can be worn both to work and outdoors.
Indian Terrain began franchising in 2005 and has opened over 100 stores with 57 franchisees in the course of last five years.
“We have an 80:20 rule in managing our product mix within our retail stores. While we have a common product mix across all our retail stores, we allow for 20% space which caters to local taste, enabling greater customer satisfaction,” says Amitabh Suri, COO, Indian Terrain Fashions Ltd.
The brand promises complete support and training to its franchisees. The total men's wear market is expected to grow at a CAGR of 8.5 per cent over the next 3 years to reach Rs 1, 31,000 crore by 2017 (source: Technopak) and so, there is space and opportunity galore for those interested in foraying into this market.
The Women’s Wear Market
The Men's wear sector may be dominating the market at the moment, but the women's wear segment shows more potential for growth in the years to come. Rapidly diversifying, the Rs 78, 500 crore worth women's wear market contributes 38 per cent to the total apparel market of India.
The growing disposable income of the modern Indian women and their willingness to experiment and adapt new styles has made this segment the focus of many Indian and international brands.The women's wear segment comprises various categories that include sarees, salwar kameez, innerwear, blouse, winter wear, sleepwear, tops/shirts, trousers, skirts, denim, T-shirts etc. Indian ethnic wear (which comprises sarees, salwar kameez and blouses) is the biggest category within the segment with a 75 per cent share of the entire women's wear domain.
With both Indian and international brands fighting it out for a share in this booming market, interesting franchise options are available in this segment.One such opportunity comes from W, a women's wear brand that takes pride in mirroring the new age Indian woman. The brand grew out of the need to offer contemporary Indian woman innovative, ready to wear stuff that combines fashion and functionality. With its range of designs, humble salwar-kameez has become a chic and comfortable wear today.
W retails out of over 140 exclusive stores and over 600 touch points with leading retailers. More than 70 per cent of its stores are franchisee-run. The brand plans to add 60 new stores to its portfolio in 2014-15.
“We do a lot of handholding as far as our franchisees are concerned. It's a business of details where you need to get involved. We have stringent SOPs set for the stores and follow up with robust mystery shopping exercise to ensure high standards of operations,” says Anant Daga, CEO, TCNS Clothing Company Pvt. Ltd.
With an aim to make designer wear affordable and accessible, Kimaya introduced Karmik in 2012. Kimaya brought together 12 leading designers to design exclusive collections for its new prêt store Karmik, which is now well-known as a multi brand designer outlet selling affordable fashion labels.
“A rise in the standard of living and the emergence of the new class of novae rich has resulted in the increased demand for luxury fashion products in the metros, tier I cities and also the tier II cities. We personalize the shopping experience for all our clients and this personal touch goes a long way,” says Pradeep Hirani, Chairman, Kimaya Fashions.
With presence in 102 stores across India and four stores in Saudi Arabia, Madame has successfully emerged as an elegant trendsetter for the feminine apparel industry. A fashion brand for young women, Madame has outfits and accessories to match every occasion. Madame started franchising in 2003. “We have got very useful inputs from our franchisees about market behaviors, trends and competitors activities,” informs Akhil Jain, Creative Director, Madame. He further adds, “There is tough competition in the apparel industry, especially with the entry of international brands. To overcome the challenge, we have a specialized design team who continuously keep a check on the latest trends and styles. Also, proper planning of marketing campaigns, website and online sales help us keep pace with competition.”
Talking about international brands, here’s Vinegar, a high-fashion Spanish brand for women, that creates styles and designs that are crazy, imaginative and arguably radical. The brand defines its USP as extreme sense of style with a designer element: along with great pricing.
The boho chic and stylish brand started franchising in 2013. After its first franchise store opened in Hyderabad, the second one is set to launch in May this year in Indore. The brand is doing its best to adapt to the Indian market. “We have studied the market extensively and keep our pricing very aggressive and competitive. We stand out in terms of designs and follow latest international runway designs,” informs Varsha Bhawnani, Owner and Managing Director, Vinegar. With rapid development and massive growth taking place in the women's wear segment, this market is expected to grow at a CAGR of 9 per cent for the next three years to reach a figure of INR 121, 400 crore (USD 22.3 billion) by 2017.
Trends in trade
With growing economic freedom and globalization, both Indian men and women want to experiment with their looks today. Here are some specific trends spotted in men's wear and women's wear.
= A Technopak Analysis points out that demand for occasion-specific clothing is rising within the men's wear segment, e.g. active-wear at the gym; formal shirts, trousers, and suits during office hours; smart casuals in the evening.
= The demand for ethnic dressing at special occasions like marriages and social functions is also a distinct trend.
= The segment is also witnessing an increase in the demand for colored bottom wear.
= Steady growth is being witnessed in the premium tailoring segment comprising fashion designers and the high-end luxury segment.
= The report says that with increasing women in the work-force, their demand for western wear is at an all-time high. This trend is expected to continue as more women enter into the workforce or aspire to follow the lifestyle of working women.
= The working women in the metros and mini metros, in addition to traditional sarees and salmar kameez, are moving towards dresses, formal suits, and business attire. Though these markets are relatively small, they are expected to grow rapidly.
= Some sub-categories within women's ethnic wear are also emerging as promising business opportunities. The demand for contemporary ethnic wear with trendy look and comfort elements is on a rise.
The game changer
‘Online selling' has emerged as one of the most important change / development that has taken the apparel industry by storm and changed the entire landscape of selling clothes. All leading industry players that we spoke with, while researching for this article cited e-retailing as a trend that is here to stay and grow from strength to strength.
Industry voices on e-commerce:
Vinegar: Brands are expanding their online and mobile presence in a big way to ensure that they are easily accessible to the target audience. Consumers are now tech savvy and also prefer to shop the easy ways.
W: The true potential of online sales is yet to be unleashed in the fashion business. More and more people are getting hooked to online shopping and with improvement in connectivity, better gadgets and security of transactions, this segment is all set for exponential growth.
Indian Terrain: Online shopping supplemented with quick delivery provides a “WOW” factor to consumers, at their own comfort.
Kimaya: Besides international-ization; use of technology, with internet playing a critical role right from finding the right franchising partners to streamlining operating procedures to getting sales leads has changed the fashion scenario.