Monday, December 16, 2019

Textile-and-Clothing-Report India Free Essays

string(45) " consumer groups with high purchasing power\." The Textile Industry and Related Sector in India Source: New Cloth Market The Textile Industry and Related Sector in India Source: New Cloth Market This market research study on Textiles and related sectors in India has been commissioned by Italian Trade Commission (Trade Promotion Section of the Consulate General of Italy), Mumbai, for which Ace Global Private Limited, a consultancy company based in New Delhi, has been appointed. The main objectives of the market research are to carry out a detailed market analysis o~ the industry, in order to identify potential opportunities for Italian entrepreneurs interested in the Indian market. The scope of the market research covers the following key segments of the industry: Textiles Apparel Clothing; Undergarments; Home Textiles, and Accessories. We will write a custom essay sample on Textile-and-Clothing-Report India or any similar topic only for you Order Now The findings of the research are presented in the following sections. Market Characteristics The Textile Industry in India is one of the largest and most important industrial segments of the Indian economy accounting for over one fifth of the country’s industrial production. It provides employment to around 15 million people who have helped produce one of the largest varieties of yarn, fabrics, textiles, clothing and garments, home furnishings and other textile products in the world. Textiles industry, including related subsectors, is worth about Euros 38 billion of which domestic segment constitutes 65% while 35% comes from exports. The textiles segment accounts for 59% of the industry, with apparel and other made ups constituting the balance. This industry also accounts for nearly 21 % of total employment in the country. Besides the textiles, apparels clothing, the industry covers a wide range of home furnishings (bed linen, curtains and upholstery, floor coverings, kitchen linen, bath linen, etc. and Accessories (including apparel accessories, like stoles, scarves, etc. , hard accessories like bags, wallets, fashion jewellery, time wear and eyewear etc. ). Market Size The total market size for the sub-sectors covered in this study is estimated at Euro 21. 7 billion in the year 200809 with textile clothing and garments having a major share of 93%. Home textiles and furnishings, and textile usage in accessories was insignificant with a collective share of less than 0. 5% of the total market. Textiles Apparel and Clothing India’s domestic market for apparel clothing is currently worth Euro 20,219 million in 2008-09. It has registered a steady compounded annual growth rate (CAGA) of 13. 6% in the past 5 years. Volume wise, apparel market has grown from 4. 8 billion units in 2004†² to 5. 9 billion units in 2008-09 at a CAGA of 5. 3%. Apparel and Clothing is the second largest retail category in India. India’s domestic market for apparels is currently worth over Euro 20 billion in 2008-09. It has registered a steady compounded annual growth ~ate (CAGA) of 13. 6% in the past 5 years. Volume wise, apparel market has grown from 4. 8 billion units in 200405 to 5. 9 billion units in 2008-09 at a CAGA of 5. 3%. Undergarments The 70’s witnessed the entry of undergarments in India when Peter Pan from Dawn Mills entered the market with lingerie styles of the West. The undergarment market further proliferated and flourished in India significantly when international majors forayed in to Indian market in a big way since the onset of the 90’s. India’s domestic market for undergarments is currently worth about Euro 1. 5 billion in 2008-09. It has grown at a CAGA of about 15% in the past three years. Volume wise, apparel · market has grown from 914 million units in 2006-07 to 1. 05 billion units in 2008-09 at a CAGA of 7%. The total urban market for the home textiles in India in 2005-06 was estimated to be Euro 1. 45 billion. With a modest growth rate of about 14%, the market in 2008-09 is about Euros 2. 16 billion and is expected to cross Euros 3. 12 billion by 2011-12. The 2004-05 Volume (million units) Menswear Women’s wpar Unisex apparel Kids’ wear Uniforms Total 1,328 1,368 – 466 1,222 ~ 423 4,807 India’s Apparel Clothing Market 2006 ·07 Value, Volume (Euro (million Million) units) 4,450 3,856 1,014 1,836 991 12,147 1,443 1,523 519 1,323 , 498 5,306 Value (Euro Million) 5,605 5,106 1,461 2,333 1,461 15,966 2008-09 (estimates) Volume (million units) 1,600 1,676 579 1,468 581 5,905 Value (Euro Million) 6,938 6,414 1,816 2,975 2,077 20,219 market for home textiles is dominated by bed and bath linen, which have more han two third of the market share in value terms. Bed linen alone has a market of about Euros 1. 19 billion according to the estimates. Apart from the home textile products given in the table below, the other articles included in the total market size are textile made-ups like wall hangings and other decorative home furnishing articles. Accessories Usage of textiles and fabrics in the Accessories sector is valued at approx. Euros 0. 28 -0. 30 billion in 200809, bf which bags alone account for 61 % and apparel accessories and other fashion accessories account for 39%. The most common fabrics used in accessories are cotton, denim, silk, wool and raxene. Given the wide variety of products, with production largely concentrated in the unorganized sector, no official estimates for consumption of fabrics in accessories sector are available. Therefore for the purpose of this study, the market size has been estimate based on discussions with key players and industry bodies during the primary research, as presented below. Demand Drivers As stated in the preceding section, the market for textiles and related products has been consistently growing annually by 12% – 15% for various sub-sectors. The key factors driving this demand are: Demand Side factors With over 1. 1 billion people, India is the second most populous country in the world. In terms of the demographic â€Å"window of opportunity†, India is home to 17% of the world’s population. It is also one of the youngest countries in the world, with over 65% of the population below 35% years of age. The young generation of professionals, both men and women, form important consumer groups with high purchasing power. You read "Textile-and-Clothing-Report India" in category "Papers" This buying group is more demanding in their choice of products, looking for quality that satisfy comfort, fitting, styling needs etc. This has resulted in a qualitative shift of consumers from low / economy range to premium and super premium range of products. Growing prosperity of middle class: Indian corporate salaries have grown at 14% per annum, which is considered to be fastest globally. A large number of households are getting added every year to the consuming class with growing income levels, resulting in increasing affluence of the upper middle and igh income strata. According to various studies, there were more than 300 million middle class people in India in 2007 with substantial disposable incomes. This number is expected to touch 600 million by 2010. There will a sustained and increasing demand for various consumer products by this segment of population. The increase in urbanization and nuclear family structure, a growing number of educated and employed women, media prol iferation and growing consumerism, have all contributed to the growth of consumerism and organized retailing. The increasing working female-population has not only increased the income of households, but also changed the outlook of women towards their choice of clothing, home furnishings and its interiors. There is a trend of going with the seasonal tastes. Market Structure and Segmentation The market segmentation for various sub-sectors is on following basis: Textile Apparels-and Clothing: †¢ †¢ †¢ Segmentation by User category: Men’s wear, Women’s wear, Unisex apparel, Kids’ wear Segmentation by Use: Formal, Casual, Traditional, Active sportswear, Uniforms Segmentation by Price: Super premium, Premium, Medium, Economy and Low end Undergarments: †¢ †¢ Segmentation by types of Suppliers: Informal/Unorganized sector, Organized sector – Segmentatfon by Price: Super premium, Premium, Medium, Economy and Low end Home Textile Furnishings †¢ †¢ †¢ †¢ †¢ Segmentation by types of Suppliers: Informal/Unorganized sector (70% share), Organized sector (30% share); Branded and Unbranded Segmentation by Use: Bed linens, Curtains Upholstery, Bath linen. Kitchen linen etc. Segmentation By Price: Super premium, Premium, Medium, Economy and Low end Accessories: Segmentation by Use: Apparel accessories (scarves, stoles, shawls etc. ), Hard accessories (bags, belts etc. ), Packaging for jewellery, time, wear, eye wear etc. Segmentation by Price: Super premium, Premium, Medium, Economy and Low end Changing face of consumer: In spite of the economic meltdown in recent times, there has been a continuous and sustained shift in consumer demand pattern from basic necessities to spending on lifestyle products and ervices continues, largely due to : †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ †¢ Higher Income Younger age profile Increasing literacy levels Higher adaptability to technology Increasing urbanization Changing role of women and children in the decision making process Increased demand for better shopping experience Impulsive purchase behavior among youngsters Changing fashion trends and increased consciousness Catch up wi th International fashion styles Sustained growth of retail culture in the country According to Central Statistical Organization, and Technopak, the retail market in India was about Euro 210 billion, and will cross Euro 440 billion in 2015, with organized retail growing at nearly 20% per year. The emergence of mall culture and rapid development of malls would act as a catalyst in this retail growth story. Due to the increase in the income levels of people and the push from the supply side of realty boom in this decade has created a housing boom in India. About 2. 5 million new homes are to be constructed to meet the demand of middle class and upper strata of income groups. Housing and Hospitality sectors are the major sectors, with huge demand for soft furnishings. As per estimates, the total shortfall of quality hotel rooms in India in all luxury, premium, economy and budget hotels is about 150,000. More than 40,000 hotel rooms are expected to come in top 10 metro cities by 2012. Supply Side Factors 1) Leading textile manufacturers are integrating their businesses vertically and have strong competencies in spinning, weaving and finishing. 2) There has been a significant improvement in the infrastructure related to textile machinery, transport and power which are further augmenting production. Government of India has allocated substantial funds · for infrastructure development through schemes like TUFS, and SITP, worker skill development trainings etc. 3) Lateral consolidation of players through organic and inorganic growth domestically and internationally. Indian companies have acquired the global brands abroad in order to consolidate their global positioning and have established wholly owned foreign subsidiaries abroad 4) End of quota regime acting as a stimulus to further export growth. Assessment of Demand and Market Potential in India The overall assessment of demand and market potential in various sub sectors, projected on the basis of past growth trends and industry expectations, is summarized in the table below. The total market is expected to increase from Euros 21. 7 billion in 200809 to Euro 29. billion by 2011-12, with overall compounded annual growth of 7. 89%. There are no authentic statistics available- on the production and the total market size of the home textile products and accessories, as no official data is compiled due to the unorganized and highly dispersed nature of sectors. The above estimates for home textile furnishings have been computed taking the overall average annual growth rates of domestic urban market (considered relevant for the foreign brands) as 15% for bath linen, 10% for kitchen linen, 12% for curtains, 15% for upholstery and 10% for other products. It should be noted that, above estimations is only for urban India, which is. Price Segmentation The price segmentation of the market is broadly in three categories: The low end market: Lower and economy (marginally improved product segment in relation to the lower category), solely volume driven, products are mostly unbranded and dominated by large number of regional and local manufacturers, and sold through small neighbourhood stores, The low and economy segment is growing in terms of volume and value and the industry is becoming more organized. The mid-range market: This segment features medium range of products. Though primarily volume driven, this category caters to diverse sections of Indian consumers across all regions, Its quality is by and large acceptable to all sections. The mid-market segment is characterized by the presence of regional and national players. The market is continuously expanding and becoming more and more competitive in respect of quality and price. The high end market: Exclusivity in product features such as high quality . raw materials, embellishments, design developments and above all branding of products for years make the products very special. ‘ Elitist categories of consumers pay for the products on demand. Mainly comprises of large Indian players and the foreign companies/international brands operating in the premium and super-premium product categories. Super-premium products are considered luxury products and marketed by top national and international giants. Illustrative prices for products in various price segments are provided in different Tables. Regional Characteristics of the Market The consumer behavior of a particular region which is economically not so developed is different as compared to developed ones. The consumers in the less developed region are understandably, more priceconscious. Always on the lookout for quality products, their guiding principle is ‘value for money’. A lower per capita income, in eastern region for example, compared to western and northern India leads to a lower per capita purchasing power. Additionally, Delhi being centrally located and Mumbai, being the financial capital have certain advantages. The consumers who live in these cities are more exposed to latest product collections and are more familiar with design, quality and latest trendy fashion, as well as the luxury of greater choice. The relatively undeveloped regions offer several in-built advantages as well. Fashion contenders setting out to do businesses in these regions find to their advantage that the region has not been exploited commercially and is prone to competition. The market, therefore, offers much but it needs to be cultivated in an organized manner. Local ready availability of products also influences a consumer. The decision to stick to a particular available product/brand seems to govern the purchase decision than the rarely available choicest product. Logistics, convenience and easy availability are important considerations for a local consumer. Regional considerations, such as climatic conditions etc. , playa major role in so far as the purchase decision of apparels is concerned. For instance, a consumer in Northern region would spend more on woolen products than his counterpart in the west or south where the winter is much milder. In India, different states are known for their specific style of clothing, home furnishings etc. For example J is the leading state for embroidered bed covers whereas Rajasthan (Jaipur) is famous for block printed, tie dye bed covers, with mirror work, appliques, and bright colors. The market also depends upon the production and raw materials and government policies and programmes in specific states. Although there is an increasing influence to western and contemporary designs, Indian industry is still greatly influenced by the traditional regional motifs, with the materials of satin mix, tapestry for drapes and even cotton mixes with synthetics for the traditional look. Fabrics with bold prints and pastels are making a comeback. Polka dots and stripes, inspired by the retro, have made a comeback into the collections the world over. The sales of textile roducts increase significantly during the festival seasons in India, by up to 40 – 50 percent. Regional and national festivals, (e. g. ‘Diwali’ is one of the most important festivals in India during October/ November) are the time to buy new clothes, renovate home furnishings. Consumer Behavior and Preferences The Indian consumers are noted as among the most discerning’ consumers in th e world with a high degree of value orientation. Even, luxury brands have to design a unique pricing strategy in order to get a foothold in the Indian market. Indian consumers also have a high degree of family orientation. Brands with identities that support family values tend to be popular and are accepted easily in the Indian market. Indian consumers are also associated with values of nurturing, care and affection. These values are far more dominant than values of ambition and achievement. Products, which communicate feelings and emotions gel with the Indian consumers. Different Segments of Indian Consumers Socialites: These are the upper class who shops in specialty stores and own exclusive accessories, and have a luxurious lifestyle. The Rich: India has over 1 million rich households (income greater than Euro 8,000 per annum). These people are upwardly mobile. Some of them in this category are Double Income No Kids (DINK) households. They spend more on leisure and entertainment-activities than on future looking investments. The Conservatives: These are the middle class population of India, who are very price conscious and demand more value for money. In addition to the above, the following segments are becoming increasingly important in purchase of consumer products: Working Women: Working women with disposable incomes are the key factors for the growth of women’s accessories. An Indian woman is no longer just a homemaker. She is willing to buy designer products and is ready to pay high premiums for the same. Youth: With the increasing exposure to International fashion styles, the Indian youth is gaining more awareness and becoming style conscious. This segment believes in impulsive purchasing. There are certain common considerations for consumers regardless of locations. The consumers by and large are becoming increasingly more and more conscious of value of money. Price sensitivity is a common concern. Purchase decisions of consumers anywhere are more guided a combination of demographic and psychometric factors, such as, disposable income, age-distribution, pattern of income distribution, quality of upbringing, aptitude, tastes and preferences and so on. These days, the purchasing behaviors in India are greatly affected by the western tastes. The role of media, magazines, televisions have been increasing in making people aware about the new trends. There is a craze to own the best brands and designs among the people. The premium luxury brands are available only in the tier1 and tier2 cities hence making them a good market. Purchase Pattern of Textile Products Major findings of textile products based on All India consumer survey conducted by Textile Committee, Government of India, 2006-07 are presented as under: †¢ †¢ In India man-made fabric among various textile materials’ sells the most. Sales of cotton come next in the order, while wool and silk constitute negligible percentage of total sales. Central, northern and western regions are the major consumers of man-made fabrics. Maximum consumption of cotton is reported from the eastern region. Consumption of cotton, in other regions is reportedly much less. This is an interesting revelation since India is ranked third as a cotton producing country in the world. †¢ †¢ †¢ Brand preferences Brand building is a stupendous task which involves high investment on production infrastructure, technology upgradation and enormous merchandizing. This has inspired lesser known medium sized players who are trying to establish their products in the market through Creation of brands. There is a strong indication that Indian market will have large a number of brands in near future in view of market expansion and increasing competition. Preference for particular apparel brands depends on individual tastes and preferences. However majority of Indian consumers look for certain common parameters like design, quality and above all merchandizing. Innovation in product design and fabric selection, are essential elements that add to value perception for a product. Sales discounts also tend to influence the purchase decisions of consumers provided the minimum parameters/ features are not compromised with. The Undergarments segment is characterized by well known national brands operating in the medium priced segment. Premium and super-premium product categories comprise branded products distinguished for exclusive product features operating at the high end of the market. Efficient logistics and supply chain management and media exposure have largely contributed to the popularity of these brands. Branding is a relatively new phenomenon in the Indian home textile furnishings market. In Accessories, the consumer demand . for premium product is on the rise. Style conscious customers with money look for variety. Consumer inclination for mix-n-match to build their wardrobe is acting as a catalyst in the growth of accessories market. Factors Influencing Brand Preference †¢ Brand preference pattern of consumers depends upon a host of factors such as : Combination of price, quality fitting as major parameters of purchase decision for sensitive but smart consumers Track record of Indian manufacturer/reputation of foreign joint venture partner. †¢ Reputation of international companies The consumers place major emphasis on product quality. Price is another important consideration attracting customers to a particular shop/brand/ product. Pre and post sales services, parking facilities and ambience of the store or mall are the other major factors that attract local customers. Sales discounts also tend to influence the purchase decisions of consumers provided the minimum parameters/ features are not compromised with. In the selection of products, the consumers do not give automatic ‘precedence to local brands over national or foreign brands. Value for money has become the over-riding consideration. Fabric, texture and color followed by proper fits and sizing weigh more importance to the local consumers rather than just easy availability of local brands on account of proximity. Degree of Elasticity of Demand of Local Consumers Considering that price elasticity depends to a large extent on the degree of competition among the manufacturers, the Lower and Economy segments of the market are usually price inelastic. These segments being highly competitive do not allow the manufacturers much leverage on price. Higher up along the value chain, the affordability or paying capacity of the consumer is higher. The mid-price segment becomes increasingly quality oriented and more diversified. Despite competitive pressure, the price in this segment keeps on rising and the demand becomes price elastic. In case of premium and super-premium product segments, where entire focus is on quality, style and brand value, the consumer is insensitive to change in price. As per the findings of retailer survey, even an increase of less than 5% in the price has an effect on low end / economy category products, while mid-end category is usually able to absorb a 5-10% price increase without a major adverse impact on the sales of a brand. Originally published in New Cloth Market: February 2010 How to cite Textile-and-Clothing-Report India, Papers

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