sectoral analysis apparel industry
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Sectoral Analysis of Apparel IndustryTRANSCRIPT
Introduction India is the world's 2nd largest producer of textiles and garments.
Currently, Indian textiles and apparel industry is estimated to be
worth $99 billion and is expected to touch $223 billion by 2021.
Indian textile industry accounts for about 24% of the world’s
spindle capacity.
Abundant availability of raw materials such as cotton, wool, silk
and jute and skilled workforce have made India a sourcing hub.
Contributes 5.2% to the (GDP), the share of apparels is 40%
Textile accounts for 27% of foreign exchange inflows & 14% to
industrial production and provides employment to over 45 million
people.
Market Size & Segmentation
69%
31%
Shares in India’s textile and apparel sector in 2012
Apparel Textile
40%
35%
25%
% Share in Total Apparel Market in 2012
Men Women Kids
Source: Technopak, Aranca Research
Share of Apparels in Retail
Source: http://www.citiindia.com
Share of Apparels in Online Retail
Source: http://www.citiindia.com
Brand presence & Sales projections
18%
82%
2011International Brand
25%
75%
2016
Domestic Brand
Presence of International Brands in Modern Retail
2011 2016 2021145 235
386273
435
664Export Domestic
Apparel Sales & Projection
Market Share: Men’s Wear
Source: Technopak Analysis
Market Share: Women’s Wear
Source: Technopak Analysis
TOP Apparel Brands
Louis Philippe, the premium menswear brand from Aditya Birla Group has not only managed to top the charts in these department chains, but with sales of over 1,100 crore during the year ended March 2013, it is also the largest apparel brand in India.
Italian fashion group Benetton's annual retail sales topped Rs 1050 Crore in India, becoming the first international fashion brand to cross that mark locally. With this, India has also emerged as the largest market for Benetton outside Europe.
Source: Economic Times
Pricing strategy
The price of a product relates to its perceived value. Lower priced
items will expect a higher volume of sales, whilst fewer sales of
luxury products may achieve the same revenue through higher
pricing.
Market skimming- new product has premium pricing to give high
revenues whilst the product is unique in the market
Premium pricing- there is a uniqueness and exclusiveness about
the product so that it can command a high price
Economy pricing- tends to be for no-frills, basic products, here the
cost of manufacture and marketing are kept minimum.
Promotional strategyDirect mail - e.g. catalogues, newsletters received by post or email.
Exhibitions or events – participating high profile at fashion events
Sales promotions - such as discounts, money-off coupons
Public relations - through press or by participating in charitable events
Sponsorship – sponsoring Events & Shows
Product placement - endorsement for the product,
Branding – hiring Brand Ambassadors, layout and decoration of its stores, its links to music, its advertising campaigns, packaging and point-of-sales displays
Supply Chain Model
Source: http://www.industryweek.com
Challenges faced
Online Retails eating market share of traditional Stores
Unreliable Sales forecasting
Seasonality driven sales
Increased Volatility
Lack of transparent Supply Chains
Competition from other Brands
Emphasis of giant retails on Private Labels
Rising production costs and flat prices
Factors driving Growth
A Fast growing Young population with high exposure to
international brands & Significant prosperity to spend
Consumers age group of 15-34 years, represents around 35% of
the total Indian population
300 Million youth would enter work force by 2025
Massive retail space creation through Malls, Hyper markets &
Super markets
Boom In luxury retail segment
Rising purchasing power of middle class consumer
India Apparel Market in 2020…..USD 120 billion plus
In Top 5 markets in the world (7% market share)
Women’s wear (42%) would deservingly be bigger than men’s
wear (39%)
Branded market (43bn) will be bigger than total market today
(40bn)
All major global brands will report India as a major contributor to
sales
Will have few many billion dollar brands and retailers
Few fashion houses will have more than 20 brands’ portfolio
Couple of retailers will have 5,000 plus stores
An online retailer would have crossed billion plus mark
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