India's current share of the apparel market is 3%. This is
far below the initial projection of 15% by 2015 when the quotas were first
phased out in 2005. The reason for this lost opportunity is that in spite of
having the second largest textile complex after China, there is segmentation
within the industry. Currently, 40% of international trade is between the
European countries.
Opportunities in the Domestic Apparel Market:
Much of this presents an opportunity for Asia. The domestic
market has shown a significant growth in past registering a Compounded Annual
Growth Rate (CAGR) of ~13%. Despite the recent demand slump, the domestic
market is expected to grow at around 9-10% in the next 5 years. The Indian
apparel market is moving away from the traditional segmentation to a much
deeper and wider segmentation based on consumer needs. Some of the segments
that are potential opportunities to watch out for are: Womens wear, Casual
wears, Kids wear, School Uniforms, Inner wear, Plus size clothing, Active wear/
Exercise wear/ Swimwear, and Youth fashion/ College fashion. Rural, mass and
ethnic wear are huge opportunities that are popularly overlooked in favor of
urban, premium and western wear. Indian domestic apparel market is currently
pegged at between 12-15 thousand crores, with several high potential
demographics still untapped such as teens, extra large sizes and children,
among others.
Issues and ways of solving them
The Indian textile sector is largely fragmented. It is also
hampered by a lack of adequately developed real estate, a shortage of trained
and specialized human capital, weak labour laws, and frail logistics and supply
chain systems. The gap between supply and demand is resulting in high levels of
attrition, skewed salaries and increased costs of doing business for the
industry.
Talent Retention
Textile industry is highly labour intensive in nature.
Managing a team engaged in doing largely repetitive work is one of the
challenges that we face.
Retention Policy
With the textile sector in India on a rapid growth
trajectory, the availability of quality skilled manpower is a constraint.
Employee retention is critical for us and we attempt to address this issue by:
- Taking care of their growth and aspirations;
- Offering them ESOP's
- Felicitation of employees with long term commitment;
- Offering retention bonus to employees
While low cost of labour is an advantage, power is expensive
and scarce; interest rates and capital subsidy are very high.
Companies need to adopt best management practices, like lean
manufacturing, from global players. With increasing global competition and
evolving consumerism it is slowly becoming a must for textile manufacturers to
be innovative. Activities like R&D and designing should be treated as key
success factors and a pre-requisite rather than an afterthought.
The industry needs fresh and innovative thoughts to improve
its existing work practices and drive efficiencies in manufacturing and supply
chain. The best way to do this is by reaching out to the young managerial
talent and give them the right incentives to join the T&A industry.
The
author is MD and Chairman, Ankita Group.
