Fashion & Apparel Retail : Key to the FutureBy: Pooja Goyal

Indian Textile Industry (USD 108 Billion)

Expected to grow by 2021 ( USD 223 Billion)

Change in consumer behaviour

Changing lifestyle, peer pressure, growing fashion and brand consciousness and increasing demand for quality products is set to fuel the growth.

Increasing disposable income

Rising per capita income, increasing purchasing power and favourable demographics is to boost demand.

Favourable trade policies

100% FDI in Indian textile sector.Technology upgradation fund scheme, Integrated textile parks scheme, Integrated skill development scheme

Growth Story

Growing youth segment and working women population with high exposure to international brands and increased propensity to spend.

Boom in luxury retail segment(USD 14 Billion) E.g. Gucci, Burberry, DiorMassive retail space creation through malls, hypermarkets and e-commerce websites - attracting high footfall

Distinguished market positioning of major department stores - clearly targeting identified segments.E.g. Lifestyle, Shoppers Stop, Reliance Trends, Westside

Growth FactorsEmerging

Opportunities

Retail Infrastructure – Number of modern trade stores are expected to increase to 67000 this year.

Rural Retailing – Huge potential in terms of consumption boom in coming years.

Luxury Market – CAGR is projected to be about 20% for period 2015-18

Online Retail – Expected to cross USD 1.3 Trillion with rising internet penetration and raining deals for consumers.

Private Label – Great scope for development as it is only 6% compared to 19% and 39% in US and UK respectively.

Sourcing Base – Poised to emerge as sourcing hub for international brands given the abundant supply of raw material and cost competitiveness.

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Talent

FDI in single and multi-brand retail will bring foreign capital and expertise While local sourcing norms will be difficult to meet at first, major players believe the Indian supply market will mature with time.

Micro-segmentation is still nascent in India, targeting and positioning will continue to be sub-optimal until micro-segmentation is developed.Identifying the right companies to partner is an ongoing process in India as companies are maturing.

Many companies have identified high import duties as one of the greatest challenge in succeeding in the Indian luxury marketThe duties have consistently been higher then other Asian countries

Lack of availability of high-streets and over-reliance on hotels; no new pure-play luxury malls addedRentals continue to be very high in metros and basic infrastructure is still weak

Manpower in India not attuned to requirements of luxury retails; companies feel skill development is one major area requiring government interventionVery few organizations such as Luxury Connect focused on talent development

Partially Addressed Minimally / Not Addressed

Effective intellectual

property enforcement

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Big Data

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Need to banish the growth of grey luxury goods. Strong legal structure combined with effective framework of intellectual property protection would help prevent dilution of brand image and reduced consumer trust.

People Want to look good for less. E.g. Max, providing fashion at very competitive prices. Localizes one third of its content sourced from its global HQs.

Big Data is next thing to hit the Fashion Industry. To better predict fashion trends and identify up-and-coming designers. Help consumers by helping them create wardrobes that are in their budget and are also in style. It also helps companies to optimize their supply chains as they can now decide what to produce more and should be stocked in inventory while what can be kept for made-to-order or Just-in-Time.

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Timing is perfect.. Million Dollar business is ripe for disruptionHigh barrier to entry Indian Government reforms for promoting growth.Increasing per capita IncomeSharing Economy extending to Fashion – Like AirBnb and Uber, Millennials might not always have budget to afford expensive clothes. Using this nascent concept users can borrow clothes and accessories indefinitely with the option to buy.

Superb Market Traction

Perfect combination of market size, unending global demand and an industry has to be fully disrupted.

Online Shopping Activity as Social Activity – Consumers have plenty of tools to connect with their peers and get instaAdvice from online customer reviews, visual CGC(consumer generated content) or even Q&A support.

Compelling Value Proposition Virtual fitting evolving with smart technologies –

58% of customers say being able to try on product enhances their experience. 3D Model of clothing from photos Ebay acquired Phisix Fashion Labs.

Integrating visual content from social networks onto product pages lead to 25-40% engagement increase and 3-6% in conversion lift.

Opportunities..

ROCE vs EBITDA

Apparel retail is better than other product categories in term of ROCE (Return on capital Employed) and EBITDA and hence the most attractive segment for retail investment

To ease out most of your ‘matching’ problems..

What do Voilet Street offers?

Amazing Options to buy Clothes and accessories

Browse matching products Select clothes from specific

occasions. Take feedback from friends

before buying

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The StoryMay 2014: Won TiETechstock event ay Hydrabad

Rewarded seed funding INR 10 Lakh

2 June 2014: Website launched.

20,000 unique visitors every month

100 looks created every day, increasing at 100% month-on-month

Funding

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Fashion Startup on a rise..

Fashion focused Social Network:

Roposo.com raised USD 5 million (over 31 crore) ₹series A investment led by the technology venture investor Tiger Global.

Another social fashion platform:

- to discover and create interactive mashups of latest fashion trends and looks. Fashupp provides catalogue of more than 200 thousand apparels and accessories currently.

THANK YOU