Ethnic wear, players stitching up new moves

India is known for its rich culture, festivals and traditional wear that differs from state to state. Despite the growing popularity of casuals, traditional ethnic wear still holds strong ground especially during festivals, weddings and occasions. The market is all set to achieve a double digit growth, but big

brands are yet to make an impact in this segment.

Retail consultancy firm Wazir Advisors estimates the ethnic wear market to grow at 12 percent by 2018 to Rs 500,000 crores from the current market size of Rs 250,000 crores. The women's ethnic wear market is expected to expand by 14 percent to Rs 1.75 lakh crores in 2018. Interestingly spite of the fast growth of casual

wear, formalwear or sportswear segments, ethnic wear market has been steadily growing across India.

Ethnic Wear: A Lucrative Business

With fashion becoming the highest selling category online and offline and rising number of women turning to high-fashion wear, investors’ interest in this category is increasing by the day. A case in point is Ritu Kumar known globally for her designer collections, some time ago, private equity (PE) firm Everstone Capital had announced its plans to pick up a minority stake in fashion label Ritu Kumar with an investment of Rs 100 crores.

PE investors are showing keen interest in grabbing a stake in women centric brands. For example, sometime back PE firm General Atlantic bought a minority stake in AND Designs India. Similarly Warburg Pincus and Faering Capital invested about Rs 300 crores in Biba Apparels, a brand that offers women and girls’ ethnic wear.

It may be recalled that after relisting his company, Kishore Biyani, who had invested in BIBA and Anita Dongre’s AND sold his stake in both these companies at three times the investment he made to streamline his businesses and reduce debt. Other ethnic wear players like TCNS Clothing, best known for its women’s wear brand 'W' had received first round of funding of Rs 60 crores from PE firm Matrix Partners in 2011. Fabindia too has attracted private equity funding.

According to CNBC-TV18 mid-sized apparel companies are now knocking on the doors of investors to fund their expansion plans and receiving a warm welcome. Many deals that are in the making for example, the buzz is that women's ethnic wear brands 'Jashn' and 'Bawree' are in early stage of talks with private equity players. More and more fashion is being consumed now, with consumers making purchases with higher frequency. And brands are playing an important role.

Move towards branded ethnics

Despite being one of the fastest growing segments, women’s wear market still remains highly unorganized. Unlike menswear categories, the ethnic women’s wear segment still has seen limited number of big brand play at a pan India level. W, Desi Belle, Fab India, Soch, Nikhaar, indeed a few brands that are coming up, “It is very difficult to build up a brand in women’s ethnic wear because women’s fashion keep changing almost overnight. Women are mostly impulsive buyers and they go for the design rather than the brand. One has to be really good and ahead in terms of design rends,” says Manohar Chatlani, Director, Soch.

His words are echoed by Ankit Agarwal, Executive, Karishmaa Clothing, a leading salwar kammez manufacturer in Kolkata, as he says “The stock and production balance is crucial in creating a brand in ethnic wear. Fashion changes so fast that keeping a huge stock of any particular fabric or colour, can be tricky for any manufacturer. Even a few months back neon colours were in however, in the last few months, sales of neon colours have dropped significantly.”

Most industry insiders believe the ethnic wear market especially salwar kameez segment will see immense growth while saris will increasingly be restricted to being occasional wear. Increasingly along with offline stores, online retail is proving to be very effective for ethnic wear brands. Brands like Nikhaar, Soch are focusing aggressively on ecommerce portals like Flipkart and Jabong.