Fit remains biggest driver, followed by comfort
Cotton Incorporated is a not-for-profit company tasked with increasing the demand for and profitability of cotton through research and promotion. At Cotton Incorporated, we have research focused on every area of the cotton lifecycle-from fibre to the finished product, and beyond that to consumer and retail research. Jimmy Rowe, Strategic Insights Manager, in a tete-e-tete with Fibre2Fashion, discusses the key research findings done on Indian consumers with respect to cotton clothing products purchase.
What kind of research studies do you conduct?
In my areas we focus on two different types of research-consumer and retail research. For the retail research that is done every year in India, we audit apparel retail stores, both in-store and online to better understand the apparel retail marketplace in India.
We have been tracking that for a while so that we understand how apparel product offerings are changing in the market here in India. We have built a good foundation on what product categories have been growing, how prices have been changing, what trends are affecting the market, and how cotton is positioned in the apparel marketplace.
On the consumer side, we do our Global Lifestyle Monitor™ study every two years across 11 countries. In Asia, we do India, China, Japan and Thailand. The last one was completed in 2018 and we will have another one next year in 2020. We also do an annual survey here in India in conjunction with CCI (Cotton Council International), to get a better understanding of changing consumer sentiments. We survey over three thousand consumers in India across both metro and non-metro cities, to understand what trends are shaping apparel shopping in India. Trends like how apparel shopping is occurring online vs in-store, is how important is sustainability to consumers, what categories are most popular with consumers, etc. We track many different topics so that we can really have a pulse on the changing needs of Indian consumers for apparel.
Are there any alternative fibres that are coming to replace cotton?
There is always competition when it comes to fibres. I know Tencel has been marketing in India. Polyester from a price standpoint is also going to be a competition for brands and retailers as they consider what fibres they are using. But cotton offers many advantages such as comfort, quality, softness, environmental friendliness, and others. Cotton is also the most preferred fibre for majority of consumers across the globe and especially in India where cotton in highly preferred over other fibres like polyester or rayon/Tencel. I think there is a very strong case to be made that cotton will continue to share large part of market here. But there always will be competition.
Are any of the BCI initiatives a part of your research?
We are for all cotton; so obviously BCI falls under that. We have our own initiative for US cotton called Cotton Trust Protocol, that was launched this year. From a sustainability standpoint, the US has been very stringent on the measures for sustainability and being sustainable because we are governed by the USDA (United States Department of Agriculture). But we want to continue to be more sustainable, so we came out with a ten-year goal or 20-25 on improving the sustainability of cotton in the US even more. The goals include increasing soil carbon, increase land efficiency, decreasing greenhouse gases, decreasing energy (consumption like) water. All the big areas that you would think of from sustainability standpoint of growing cotton. US. cotton continues to be on the forefront of sustainability and we will continue to ensure that US cotton is the best and most sustainable in the world.
What are the demographics of these consumers?
We try to make our research as representative of the Indian population as a whole. There might be a little more focus on some of the bigger cities, because it can be harder to reach some of the consumers in tier-II or tier-III cities. We continue to work on expanding our research every year to improve our understanding of the different regions and demographics across India. This last year we expanded our research to include some of the smaller non-metro cities like Ahmedabad, Jaipur, and Guwahati. We are now conducting our consumer research across 10-12 different cities across India capturing a mixture of metro and non-metro areas.
What were the top five broad parameters that are considered for the research?
I think the top parameter is that we want our research to be representative and accurate of consumers here in India.
Number two is that we want our research to be reflective of what's happening here in India. We try to design questions in the way that we can understand or at least find out what's consumers opinions on topics like sustainability, activewear, denim, online shopping, and apparel in general We try to pick topics that make the most sense for based on retail and consumer trends here in India.
Next, we really want to understand the key factors that are influencing clothing purchase. Whether it is comfort, fit, colour, price, performance features, etc…. We want to better understand what is really driving purchases and what things are shaping what and how consumers are shopping for and buying apparel.
Then the big picture for Cotton Incorporated is how does cotton fit into all of that, how does cotton fit into influencing clothing purchases, changing closets, and ultimately consumers' needs in India.
Lastly, and this is something we are continuing focusing on is how to improve our research. We want to continue to expand our research to reach and understand more of the consumers across India. Many brands and retailers may have an understanding of consumers in the bigger cities but what are the consumers apparel shopping habits and opinion for Indian consumer in the smaller cities and regions.
What is the impact of BCI initiatives on the global cotton market?
That question is probably best suited for BCI, as they would have a better understanding of their impacts.
What kind of impact has the US-China trade war had on the global cotton trade market?
With the latest round of increases (U.S. hit Chinese-made apparel with tariff increases September 1st), the trade dispute now directly touches all stages of the supply chain - from fibre to finished apparel.
The US is the world's largest exporter of cotton fibre. China is the world's largest cotton importer. The US had been the dominant source of fibre to China. Even though China increased its imports 70 per cent in the 2018/19 crop year, the US exported less cotton to China because of the tariffs.
The US is the world largest importer of apparel. China is the world's largest apparel exporter. Although the US had been threatening China with tariff increases for more than a year, it is only in the latest trade data - for September and October - that we have started to see some movement away from China. It will likely be another 8-10 months until we see the complete effects of the tariff increase on U.S. apparel sourcing.
Beyond these direct effects on the apparel supply chain, an even larger impact has likely come from the cumulative consequences of smaller orders across industries/countries on global macroeconomic conditions. The slowdown in global economic growth has been coincident with escalation of the trade dispute. Slower economic growth is correlated with slower demand for fibre and apparel, and, in turn, has contributed to even lower order volumes and lower fibre prices.
What are the key findings of the research study?
One of the biggest takeaways would just be if you look at India versus a lot of other countries across the world, the growth rates for both GDP and apparel expenditures is going to be much higher than are being projected for most other major economies across the globe. Because of this we are seeing a lot of international brands on the apparel side trying to come to India to really be a part of that growth that you are not seeing necessarily in the developed markets like the US, UK, Japan. India and China, from a growth prospective, are seen as the bright spots for apparel for over the next five or ten years.
Some of the key things we are seeing from a research in India is continued growth in online apparel shopping, increased interest levels in sustainability and transparency for consumers, and a fundamental shift in Indian consumers closets, away from traditional wear into other categories like denim and activewear especially for the youngest generation of Indian consumers.
What is the buying behavior of Indians when it comes to cotton products?
There has always been a very high affinity for cotton for Indian consumers, as nearly 9 in 10 Indian consumers say they prefer their clothing be made from cotton. And in the apparel retail space in India it has been a very cotton rich from clothing standpoint for a long time now. I don't think that will change especially when you see denim continuing to become more popular which is a strong category from a cotton standpoint. If you look across the different categories there is very strong or high preference for cotton as the majority of Indian consumers feel like cotton really meets their primary needs when shopping for clothing such as comfort, quality, and durability.
What will be the production and consumption of cotton in China as a result of the trade war?
Over the past several years, Chinese production has shifted to Xinjiang province, where there are still price guarantees in place. As a result, the trade war is not expected to have much of an impact on Chinese cotton production.
China has been suffering from slower economic growth. This has been accompanied by slower demand growth for the domestic apparel market. Although it still will be a few more months until we have a full understanding of the effects of US tariffs on China-made apparel, a slowdown in US orders from China can be expected. Weaker domestic and international demand for Chinese apparel should weigh on demand at each stage of the Chinese supply chain, including spinning.
Because the import duty is high in the US and EU on import like garments from China now. So, are you seeing work from China being spread into other neighboring countries?
There has been some movement in sourcing away from China. Vietnam, Bangladesh, and India have benefitted in certain product categories. However, China remains the dominant location for US apparel sourcing and it will take shifts on a scale much larger than what we have seen so far to change that.
For several years, there have been incentives, like the promise of the TPP agreement, that encouraged movement away from China but there was not much of change (of course, TPP did not happen).
China offers a scale and breadth of options unmatched by many other countries. China has technical expertise and the infrastructure to deliver. A commonly cited reason for companies keeping sourcing in China is that China maintains contract sanctity, shipping what was promised when promised. There are reasons why sourcing has not moved away from China in the past, and the value of those reasons will be balanced against the cost of tariffs as long as tariffs are in place.
Are Indian consumers warming up to circular fashion? Is fast fashion on a decline in India?
So far, I would say it's more of a superficial thing. Some consumers are aware of the circular economy and what that relates to fashion standpoint. But in India we don't see a lot of offerings from different brands or retailers for recycled clothing or even offering to take back old clothing for recycling. In the US it is bit different where we see a lot more brand retailers making that effort. I don't think it's picked up here in India yet. But with sustainability being so important for brands and retailers especially in the apparel and other things, it is going to come at some point especially when I think India is going to be the largest population in the world in the next 10 years. That is going to be a lot of clothing. We have to find new ways to recycle or reuse that apparel so that it is not ending up in a landfill. I see consumers across the globe are concerned about what the future will look like and they don't want to have their clothing end up in landfills and not be reused.
Any brands that seem very keen on bringing that recycling culture?
At Cotton Incorporated, we continue to explore new technologies and opportunities for recycling old cotton clothing. We have one program called Blue Jeans Go Green™ that with the help of our partner brands and retailers collects old denim clothing items which are upcycled in housing insulation. But really, we fell like all brands will need to consider the impact of their clothing items at the end of the life cycle. Everybody understands sustainability is not an option anymore, especially when we talk about consumption levels rising so much in India. There is going to be a lot more apparel in the market. Brands and retailers are starting to recognize there is an opportunity to not only tell a sustainable message but also to do something good for the environment which is what brand and retailers have to do to create a more sustainable world.
Are brands a part of this research too?
Sometimes. But we don't focus a lot on brands themselves because we are for the all-cotton, so we try to get cotton into every brand if possible. Sometimes we are looking at different brands which are most popular, so that we can understand from an internal strategy standpoint are the key player to focus on when discussing how to drive more cotton products into the marketplace-just maybe from that standpoint. But not normally a core part of our research.
Is there a pattern in consuming more clothes that are made in India, not necessarily made by a foreign brand? Is there any conscious decision that goes into sourcing products that are made locally?
In my consumer research in India, from the consumer standpoint, I don't think that they are looking specifically for either clothes made in India or locally. I think in some other areas there might be some interest in that but again it's probably pretty small for the most part. When we talk about what are the primary factors for shopping for clothing, country of origin or where an item is made would be towards the bottom of the list. Most important things would be like fit, comfort, price, cotton right at the top. There's probably a niche consumer that might be looking for locally sourced clothes, but from our research we don't see many Indian consumers consciously seeking it out.
So fast fashion is not declining in India anytime soon?
If you look at fast fashion, we are seeing a lot of fast fashion brands even though they are offering cheaper clothing, they have started to return a little bit more towards quality. If you look at the Forever 21 and bankruptcy in the US… if you continue to have that model, it is not going to be as successful as it was in the past because sustainability is becoming more important for consumers and they want that quality, they want something that they can wear for two years and not have to throw it away after two or three washes. Consumers are beginning to recognize, especially the young consumers who are little more forward thinking about things, that quality and having some last is more beneficial to not only them but also the environment.
Also, do you think that consumers are even looking at the fabric composition or fibre composition? Or looking into clothing label to see what is really going into making that piece of garment?
In India, close to 70 per cent consumers say they always or usually check the concept label. That's a little higher than we see in some of other countries we do research in. Again, it is that affinity for cotton here because it is something that is so ingrained and keeps apparel beautiful for so long that I think it is important to a lot of consumers which is why they look for on it on the labels. But that's always something we are trying to focus on getting consumers check the label because we have seen over the years that sometimes consumers get so used to touching a garment a purchase point. But that sometimes can be inaccurate because every time they touch, they might just assume that it's cotton, but it may not be so.
Are there any tier-II towns and tier-III towns that have been covered in the research?
We did do a few but I need to double-check. In our consumers research we cover the non-metros of Lucknow, Indore, Coimbatore, Patna, Ahmedabad, Jaipur Guwahati. And we are looking to continuing to expand into more non-metros each year.
Is the consumption of textiles and apparel growing via e-commerce, social media?
Definitely. We have seen in the last couple of years a very significant growth of online apparel, growing from ₹95 billion in 2014 to over ₹400 billion last year. There are some things that consumers are concerned about shopping online but the convenience of being able to shop from stores that may not be in your local facility has been very appealing to most Indian consumers, understanding the fit, quality are the number one global issues for consumers when looking for shopping online for apparel. But it is still going to grow very substantially here in India just from the opportunity standpoint as the infrastructure growth or opportunity may not necessarily be there for some brands and retailers. So, I think we are looking over the next five years that online apparel sales are expected to double again. Online apparel sales are projected to be about over 17 per cent of all apparels sales by 2022 in India.
What are the major influences while purchasing a garment or home textile product for an Indian consumer?
Fit normally is #1-that's probably the biggest driver and then comfort. With a shift towards casualwear comfort is becoming a little more important. Consumers really want to be comfortable when it comes to their clothing and I think cotton plays a major role in giving consumers that. Quality is the third most important thing and is actually very important here in India, maybe more than we see in most of the other countries. Next is price which always plays a factor. It's got to be the right price. Those are the biggest factors that you see while purchasing clothes here in India.
How is the research carried out? Through e-mail or physically?
Here in India its face to face because internet penetration is still only 40 per cent. So, going online makes it hard to get a representative sample. We would like to move it online because it is less expensive but we are sticking with face to face interviews so that we can be more representative of India. (HO)
