Growth Prospects

According to a study by Technopak (Management Consulting firm), the market size of apparel will jump to US$ 92.8 Billion from US$ 25.9 Billion in 2006. (Refer to the table below)

Source: Technopak Retail Outlook, vol-1

In the coming years, new retailing formats will emerge in the India markets giving it a total new design, for example the Cash & Carry format, which is being introduced by the Metro group of Germany, which will revamp the wholesale format. This format supports the need of the small mom and pop retailers in India. Since 100% FDI is allowed under this format, it offers a very lucrative mode of entry for the international retailers. According to the management consulting firm, Technopak, 6% (est.) of total investment in retail over the coming five years is expected to happen through this channel. Secondly, Super-Specialty Formats through which retailers will target a specific customer group. In India, currently, retailers like Giny&Jony and Lilliput (kids-wear), Mothercare (expecting mother), Mustard (plus-sized women wear) etc. are prevalent which cater to specific needs of their respective target group. These formats are basically designed on different categories or demand of the customer.

Own Label branding

Indian Market is a price sensitive market but the consumer doesn't want to compromise on the quality either. In such a scenario, 'own label branding' is taking its place in the market. Retailers engaged in own label branding or private label get high margins as compared to branded items. For private labels to be at par with the branded goods, retailers employ aggressive marketing campaigns. The private labels not only get higher margins but these labels prove to be a competitive advantage for them over the branded goods. Globally, the demand for demand for private labels is increasing and they contribute an overwhelming 17% of the total retail sales and continue to grow at a rate of 5% p.a. which is very appreciable.

In India, Local retailers such as Ebony promotes its own label by the name of etc, which is at par with the other apparels or garments being showcased at its outlets. Not only Ebony but retailers like Shopper's Stop, Westside have also come up with their own label brands like Wal Mart in USA has almost 40% of their own label brands and TESCO in U.K. has 55% of their own label brands being sold at their retail outlets.