Indian Garment/Fashion Retail Sector

      Anew focus on the apparel retail sector has attracted attention in recent days. Top exporters have introduced their own brands and are aggressively positioning themselves within segments of the domestic market. The rising importance of branded segments in the domestic market combined with the pressure of import competition is blurring the boundaries between exports and domestic production in countries with large home markets, such as India. With the changing lifestyles, organized retail is playing a key role in structuring the Indian domestic market, reinforced in particular by rising incomes and growing purchasing power among consumers in rapidly growing sectors of the economy such as information technology and business process outsourcing.

Retail sector in India is witnessing a huge revamping exercise as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. The branded apparel market represents the largest source of growth. The men’s branded apparel market is growing at a rate of 21.8% and branded women’s apparel segments represents 35% of the total branded apparel market and is growing at an incredible 23% annually.

Leading domestic retailers are becoming more firmly entrenched, increasing their scale of operations and stabilizing their logistics and technology initiatives. A few significant foreign players have been selling their branded apparel in India for number of years. But, now, just like their India counterparts, global apparel brands are setting up their own apparel outlets, instead of just selling through departmental stores. Though local retailers generally enjoy higher margins, they wont be able to keep global retailers at bay for long because of international experience, buying power, IT systems and cash flow to tolerate lower profits. Presence of these brands will make the Indian Consumer become more aware of the international fashion and lifestyle trends leading to a move-up of the industry in the value chain. In this paper, the recent trend and prospect of apparel retail sector in India have been discussed.

Fashion retailing, marketing

Once the clothes have been designed and manufactured, they need to be sold. But how are clothes to get from the manufacturer to the customer? The business of buying clothes from manufacturers and selling them to customers is known as retail. Retailers make initial purchases for resale three to six months before the customer is able to buy the clothes in-store.

Fashion marketing is the process of managing the flow of merchandise from the initial selection of designs to be produced to the presentation of products to retail customers, with the goal of maximizing a company’s sales and profitability. Successful fashion marketing depends on understanding consumer desire and responding with appropriate products. Marketers use sales tracking data, attention to media coverage, focus groups, and other means of ascertaining consumer preferences to provide feedback to designers and manufacturers about the type and quantity of goods to be produced. Marketers are thus responsible for identifying and defining a fashion producer’s target customers and for responding to the preferences of those customers.

Marketing operates at both the wholesale and retail levels. Companies that do not sell their own products at retail must place those products at wholesale prices in the hands of retailers, such as boutiques, department stores, and online sales companies. They use fashion shows, catalogs, and a sales force armed with sample products to find a close fit between the manufacturer’s products and the retailer’s customers. Marketers for companies that do sell their own products at retail are primarily concerned with matching products to their own customer base. At both the wholesale and the retail level, marketing also involves promotional activities such as print and other media advertising aimed at establishing brand recognition and brand reputation for diverse characteristics such as quality, low price, or trendiness.

Closely related to marketing is merchandising, which attempts to maximize sales and profitability by inducing consumers to buy a company’s products. In the standard definition of the term, merchandising involves selling the right product, at the right price, at the right time and place, to the right customers. Fashion merchandisers must thus utilize marketers’ information about customer preferences as the basis for decisions about such things as stocking appropriate merchandise in adequate but not excessive quantities, offering items for sale at attractive but still profitable prices, and discounting overstocked goods. Merchandising also involves presenting goods attractively and accessibly through the use of store windows, in-store displays, and special promotional events. Merchandising specialists must be able to respond to surges in demand by rapidly acquiring new stocks of the favored product. An inventory-tracking computer program in a department store in London, for example, can trigger an automatic order to a production facility in Shanghai for a certain quantity of garments of a specified type and size to be delivered in a matter of days.

By the early 21st century the Internet had become an increasingly important retail outlet, creating new challenges (e.g., the inability for customers to try on clothes prior to purchase, the need for facilities designed to handle clothing returns and exchanges) and opening up new opportunities for merchandisers (e.g., the ability to provide customers with shopping opportunities 24 hours per day, affording access to rural customers). In an era of increasingly diverse shopping options for retail customers and of intense price competition among retailers, merchandising has emerged as one of the cornerstones of the modern fashion industry.

Media and marketing

Media of all kinds are essential to the marketing of fashion. The first dedicated fashion magazines appeared in England and France in the late 18th century. In the 19th century, fashion magazines—such as the French La Mode Illustrative  the British Lady’s Realm, and the American Godey’s Lady’s Book—proliferated and flourished. Featuring articles, hand-colored illustrations (known as fashion plates), and advertisements, fashion magazines—together with other developments such as the sewing machine, department stores, and ready-to-wear clothing produced in standard sizes—played a significant role in promoting the democratization of fashion in the modern era. The development of effective and inexpensive methods of reproducing photographs in print media in the early 20th century led to the rise of fashion photography and of heavily illustrated fashion magazines such as Vogue. Magazine advertising rapidly became a principal marketing tool for the fashion industry.

The creation of cinema newsreels—short motion pictures of current events—and the rise of television made it possible for people all over the world to see fashion shows and to imitate the fashionable clothing worn by celebrities. The dominance of visual media continued in the Internet age, with fashion blogs emerging as an increasingly important means of disseminating fashion information. Red-carpet events such as awards ceremonies provide an opportunity for celebrities to be photographed wearing designer fashions, thus providing valuable publicity to the designers.

India’s apparel market is in the throes of change. Rapid growth and rising urbanization have spawned a new class of consumers with more money to spend, and a growing passion for fashion. In India’s high-growth, fast-changing retail clothing market, we see significant new growth opportunities for foreign and domestic players.

In India, apparel is the second largest retail category (behind food and groceries), representing approximately 10 percent of the total market. This growth is being driven by following factors:

·        New occasions:As the lifestyles of India’s prospering urban consumers have evolved, their clothing needs have broadened, reflecting more varied usage occasions. For men, clothing choices once came primarily in three basic categories: home-wear, work clothes, and special occasion wear. Now, with more “socializing” opportunities, men are buying more sophisticated combinations of outfits: party wear, sportswear, clothes for hanging out at the mall. Not long ago, for example, men from India’s northern regions only required a good dark suit or Sherwani, the traditional long coat, to cover big occasions and important celebrations. But over the past several years, men have begun to supplement those staples with expensive Western style jackets, and collared shirts—some in “funky” patterns and cut for a night on the town, others in stripes or checks for casual meetings with important business associates. Today, Indians are more inclined than consumers in other markets to buy apparel for a specific purpose.

·        Fashion increasingly a form of self-expression. Increasingly, Indian consumers are embracing the idea of fashion for its own sake, as a means of self-expression, and not merely as a functional purchase. Television, movies, advertising and the Internet bombard today’s Indian consumer with new ideas about style, even as American-style shopping malls lure them away from traditional marketplaces. Traditional clothing remains central to the way consumers dress, and the quality and craftsmanship of classic Indian clothing have drawn rave reviews in recent years from some of the world’s leading designers, style magazines, and fashion blogs. In a recent McKinsey survey of Indian consumers, 62 percent said they thought it was important to “keep up with trends.”

    Example

    Pantaloons:

   Pantaloons are one of the biggest retailers in India with more than 450 stores across the country. Headquartered in Mumbai, it has more than 5 million sq. ft retail space located across the country. It's growing at an enviable pace and is expected to reach 30 million sq. ft by the year 2010. In 2001, Pantaloon launched country's first hypermarket ‘Big Bazaar’. It has the following retail segments:

·        Food & Grocery: Big Bazaar, Food Bazaar

·        Home Solutions: Hometown, Furniture Bazaar, Collection-i

·        Consumer Electronics: e-zone

·        Shoes: Shoe Factory

·        Books, Music & Gifts: Depot

·        Health & Beauty Care: Star, Sitara

·        E-tailing: Futurebazaar.com

·        Entertainment: Bowling Co.