Study: Indians love spending on clothes

With the growing retail market, the share of branded products in the readymade garment segment in India is set to rise to 48 percent in 2019 up from 35 percent in 2014, reveals a study by Edel Invest Research of Edelweiss, the financial services group. The report also says, with growing e-commerce, along with innovation disruption created by fast fashion, changing consumer trends and preferences, branded apparel industry will get a boost. Top players in this segment including Siyaram Silk, KKCL, Indian Terrain, Arvind and Madura Fashion will benefit. And what will add to the segment’s growth is the entry of top global brands.

The study expects the branded apparel segment to register 10-12 percent CAGR (compounded annual growth rate) over 2014-19, driven by a jump in volumes and realizations. Mild inflation and a spurt in gross domestic product are bound to induce consumers to spend more. Other factors like favorable demographics of a younger population, influenced by Western culture, along with improved affordability and willingness to spend on one's looks and image, a shrinking unorganised sector and a burgeoning middle class will perk up business.

“The online retailing market is expected to grow to 44 billion dollars (Rs 2.9 lakh crores) by 2018, as against 13 billion dollars (Rs 87,000 crores) in 2014, with apparel being one of the biggest beneficiaries -- it already has 31per cent of the online retail presence. E-commerce also helps e-tailers in real-time consumer data analytics. These involve identifying consumer trends, which are then combined with other indicators such as income levels to devise customised offerings, helping e-tailers capture the latest trends, accurately target customers and continuously innovate to stay ahead of competition," the report says. Rising demand for readymade garments is replacing stitching of clothes. Also price sensitivity has been replaced by quality, brand recall and aesthetics.

Saturation of available retail space and infrastructure and operational challenges, coupled with a rising internet penetration and jump in the number of Indians owning an internet-enabled smartphone, have led to most retailers’ looking at avenues such as e-commerce. This platform offers consumers attractive discounts on good quality and trendy products, a larger bouquet of products and brands to choose from, the convenience of cash on delivery and ease in returning of products.