Home / Knowledge / News / Apparel/Garments / Consumer demand falls as apparel prices rise
Consumer demand falls as apparel prices rise
Jun '11
A 20 percent fall in the country's apparel sales since March 2011 has compelled a number of companies to announce their 'end-of-season' sale a little earlier than the usual July first week schedule. Adidas, Mango and Reebok are all included in the list of brands which have already kicked off their 'end-of-season' discount sale.

The surge in cotton prices and the imposition of a 10 percent mandatory excise duty on branded garments in the Union budget have led to an increase in the prices of apparels, leading to a sluggish demand this season.

In a report submitted to the Textile Ministry, the Clothing Manufacturers Association of India (CMAI) has mentioned that a rise of around 10 to 20 percent has been noted in inventory levels of majority of the retailers and producers. The Association has demanded either complete rollback of the excise duty or reducing it to one percent to ease the prices and push demand.

The soaring cost of production due to an increase in the cost of raw material, labour and borrowing costs, has outpaced the rise in prices. Hence, the organized apparel sector which registered a turnover of Rs. 400 billion last year is troubled by decreasing profit margins. Looking at the present situation, it appears that the apparel industry would not be able to maintain a growth of 10 to 15 percent.

Industry sources say that initially the retailers shifted the burden of hike in raw material prices on to the consumers, but now it is getting difficult for them to do the same, as any further hike in prices would adversely hit the demand.

Affected by the rising prices of fuel and food items, a lot many customers have already shifted to buying more affordable local brands rather than their usual preferences. This has benefited the private local brands which have grown in spite of an increase in prices in that segment too.

However, industry experts believe that the actual effect of the rise in apparel prices will be seen during the festive season as the rise in cotton price would start reflecting by then.

Retailers are concerned about sustenance and development of their business. Some of them have curtailed their orders for winter apparels, as it is expected that the demand for costly apparels will be low in the coming months.

Though there has been a correction in cotton prices, the input cost for the items that are meant for sale in autumn and winter season is bound to remain high, which would keep the prices of those products at a higher level.

The inventory cost of the organized retail industry for the past three months is estimated to be around Rs. 25 billion, while the overall turnover is supposed to be around Rs. 100 billion.

According to the industry experts, the demand from consumers belonging to low-income groups would be hit the most as they would spend more on food items which are getting dearer owing to ongoing inflation. However, the demand from the middle-income groups and salaried consumers may not suffer that much as alongside the inflation, their income has also grown.

Fibre2fashion News Desk - India

Must ReadView All

Apparel/Garments | On 26th Jun 2017

GSTN registration reopens

E-commerce operators and TDS (tax deducted at source) deductors can...

Textiles | On 26th Jun 2017

Expedite release of ROSL pending claims: TEA to Centre

The Tiruppur Exporters' Association (TEA) has again urged Union...

Textiles | On 26th Jun 2017

'Export promotion schemes to continue under GST regime'

The export promotion schemes will continue under GST regime, said...

Interviews View All

Marazban F Velati
Sutlej Textiles & Industries limited

No training can be effective till the candidate believes in it.

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Smita Murarka

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


news category

Related Categories:
July 2017

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search