Indian shoppers will influence global fashion - Expert

09 Jul '12

4 min read

Giving an overview of the Indian garment industry, he avers, “Indian apparel industry is highly fragmented in nature. Due to the low entry barriers, numerous players have entered the industry. Domestic players enjoy better margins as against the exporters.”

Explaining the reason for presence of huge unorganized sector in the Indian clothing industry, he says, “Indian shoppers have loyalty to a store rather than any particular garment brand. This has led to a thriving unbranded or local brand market for ready-to-wear clothes leading to severe competition. Customers look to design and fit of the clothes, and use the shop’s name as a quality standard.”

Talking about the future of Indian apparel sector, he opines, “The overall Indian demand story is intact, and the decision to allow 100 percent foreign direct investment in single-brand retail will increase competition in the domestic market. In fact, Indian companies will be keen on expanding now so that they can create enough brand recall before the onset of international brands.”

Global apparel brands are currently making their mark and increasing their presence across Tier 1 and Tier 2 cities in India, whilst at the same time, regional and local brands are also upping their competitive presence.

There are a lot of small and medium sized players, who are actually giving tough competition to the national and international brands. These small domestic brands are growing by over 25 percent annually and are expanding their base to other parts of India to become national players, according to Mr. Mehta.

“Among the challenges that apparel brands currently face are increased, cost-based competition from other countries like Bangladesh, Vietnam, and Sri Lanka; fluctuations in the demand in exports due to the elimination of quota regime; higher borrowing cost, which affects the profitability of the small and medium firms; and rising input costs,” avers Mr. Mehta.

Fibre2fashion News Desk - India

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